7 Governance, performance management and financial support

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3 Section number Description Page number 1 Introduction 1 2 Key achievements in 2017/ Priorities 1 4 Five year issues 1 5 MHA staffing costs 2 6 Communications 2 7 Governance, performance management and financial support Workstream planning 2018/19 and costs Assets, standards & commodities working group Medium schemes Professional services Skills community Term Sources of income 8 10 Overall budget 9 Annexures A B HMEP RAG rating MHA Communication plan C Fees and subscriptions 2018/19

4 1. Introduction This Business plan outlines what the MHA plans to do over the next financial year, and how it will be funded. The plan does not include for the possibility of a merger between the MHA and MSIG because that is still uncertain in both timing and extent. The plan is in four parts. The first section sets priorities, the second looks at what the work streams are planning to do, the third is about income sources, and the fourth shows the overall budget for the year. Annexes include the performance indicators, and the Communication plan. Last year, the theme of the MHA Annual Event was Celebrations and Aspirations, including a retrospective of the first ten years of the and a review of some of our many achievements. The aspirations included the planning for a new medium schemes framework (MSF3) and discussion on how to achieve a closer relationship with Midlands Service Improvement Group (MSIG). This year, the theme progresses to Aspirations and Alliances. These aspirations will include a replacement framework for professional services which will enable the forging of new alliances, with MSIG, framework contractors and professional service providers alike. 2. Key achievements in 2017/18 Well attended annual conference Successful workshops on DfT self-assessment and Risk-Based approach Continued development of Medium Schemes Framework with increased savings Used in LGA 2018 National Construction Category Strategy as an exemplar of an effective framework. Increased usage of PSP2 and collaborative projects Term maintenance Cultural Framework in use Increased scope of learning and development to support specific initiatives 3. Priorities for the year The overall priority of the Alliance is to improve the efficiency of highway services by working collaboratively. The objectives supporting this aim include the need to provide collaborative frameworks for construction and professional services. Therefore the two major issues for the alliance in the coming year are to:- get the replacement Medium Schemes Framework (MSF3) up and running. undertake the procurement of the replacement professional services framework. 4. Five year issues Many issues will impact on the alliance over the next five years. To assist in identification and ranking future priorities, a list of issues was identified and a survey of Executive Board members was carried out in early the results are presented in Graph 1: 1

5 Graph 1: Results of 2018 Executive Board survey Other priorities/issues cited in the survey: involvement in the development of Strategic links / co-ordination with Local Industrial Strategies via LEP Adept working groups? Value for Money From this the top priorities, as indicated by the survey, are: develop a joint approach to the Risk based Approach to maintaining highway infrastructure tackling the skills shortage ensure each authority maximises its funding through the self-assessment process Interestingly, the MSIG/MHA merger, Construction 2025 and Social Value were not identified as a priority in the survey. As a result, the Construction 2025 drivers have not been used as a proxy measure of performance. 5. MHA staffing costs The MHA has a core team of four dedicated staff, who manage the work of the Alliance including the work-streams, and the frameworks. They are permanent employees of Leicestershire County Council, which acts as host authority to the MHA and their time is recharged to the Alliance. Table 1 provides the financial breakdown for the MHA team. 2

6 Table 1: financial breakdown of MHA core team MHA role inc. NI and expenses MHA Manager 73,400 detail Manages all Alliance activities and acts as framework manager for PSP2 and PSP 3 Framework Manager 55,590 Skills & development manager MHA Support Officer 43,960 Framework Manager for MSF1, 2 and 3. Manages activities of skills community 33,150 Supports all the activities of MHA, including financial management 6. Communications For an organisation that aims to share good practice the provision of timely information, effective communication and use of media is vital. An updated MHA Communications Plan (Annex B) outlines key events and methods of engagement to be used throughout the year. Communication support is provided by Leicestershire County Council, using two members of the wellestablished Communications and Media team, on a time-charged basis. A variety of media is used for spreading the word, our own website ( a group on Linked In, e-updates (newsletters that are sent to people who have asked to be subscribers and a Twitter account (@midlandshighways). The MHA SharePoint collaborative platform continues in its development and is used by MHA members to access secure information. The Annual Event showcasing MHA, MSIG and our frameworks activities is now well established and requires significant communication support. In addition, participation in the event by other bodies -such as the ICE, CIHT, HTMA, RSTA, MPA, CECA, National Association of Construction Frameworks (NACF) has increased. This communication support, the licence fees associated with the MHA website and SharePoint are estimated at 20, Governance, performance management and financial support These roles are mostly carried out by the MHA Manager or by the chair of the respective board so do not accrue any costs. However, funding is needed to provide the MHA with ad hoc expertise. This includes: external legal advice, relating to the review of the alliance agreement, procurement advice and input, support for applying for funding streams and preparation of case studies 3

7 The performance of the Alliance is measured by using the HMEP Collaborative Toolkit indicators, and is presented as Annex A. The indicators are only showing whether the Alliance has improved as no other Alliance has reached the stage of using them as a proxy measure of progress. This year, there are 0 red (0 last year) 3 amber (5) and 27 green (25), which demonstrates continued high performance. The processing of invoices and payments on behalf of the MHA is undertaken by Leicestershire CC. The charge to the MHA was 3,000 in 2017/18. For 2018/19, it is proposed to retain the sum of 3,000. There is a cost for the regular meetings of both Executive and Programme Boards of approximately 1,500 it is felt prudent to retain the amount of 6,000 in the budget for 2018/19. 8 Workstream planning 2018/19 and costs Each of the following workstream proposals has been prepared by the workstream lead and approved by the group (where applicable). It should be noted that the total cost of the proposals exceeds the total income by a large amount ( 290k), and will use up over 64% of the reserves. However, budgets are generally underspent. 8.1 Assets Standards and Commodities (ASC) workstream lead Martin Carnaffin, Nottinghamshire A move from periodic meetings to one-off events has allowed MHA members and affiliated organisations to opt to attend specific meetings - which were of interest to them and their Authorities. The change in format has been successful in meeting its aims - to cement linkages with MSIG. Their representatives have been included in the invitations to events - broadening the base for participation. Additional authorities have taken part; and the most appropriate officers have attended these workshops. In addition, these events are a good fit for the future strategies of both the MHA and MSIG. There have been high levels of attendance at the workshops convened to support specific subject areas. The level of engagement from affiliated organisations, such as the HTMA, framework contractors and member authorities has increased and post event feedback has indicated their usefulness. Table 2 provides a summary of ASC activity Table 2: ASC workshops convened in 2017/18: Subject area led by attendance No. of organisations RBAM I code of practice aecom Local cycling and walking aecom investment strategies RBAM II output MSIG/MHA 17 8 It is planned that during 2018/19 at least four or five such events will be offered. An estimated budget of 20,000 will be required. The update of the Harmonised Specification is no longer an ambition of the Alliance. However doubts over the future of the 6C s design guide may provide an opportunity for a collaborative project to include that and some additional funding has been included for this eventuality. 4

8 Procurement cost: 40,000 The pilot project identifying what BIM means to a local highway authority is being sponsored by the Professional Services Workstream. Total cost: 60, Medium Schemes workstream lead John Hooper MHA The work stream has had considerable achievements during the 2017/18 financial year with schemes worth 260m being delivered, ECI savings identified of approx. 15%, a very effective framework community board providing governance and performance monitoring, and the start of the procurement process for MSF3. Considerable work has gone into developing relationship management plans for four authorities and the framework contractors, and the alliance was successful in applying for membership of the National Association of Construction Frameworks. The high level objectives for the Medium Schemes work stream remain as: MSF2 Framework Community will continue to maintain its effective governance processes, active stakeholder engagement and client leadership role o Complete the procurement process for MSF3. o Increased usage of the Sharepoint collaborative platform to share learning o Greater involvement of the supply chain at meetings o Peer review of social value measures Cost of meetings: 3,000 Further development of new and existing collaborative relationships Relationship Management Plans (RMP) by: o Comparison and contrasting different RMP and offer introduction to other authorities o Develop RMP with sub-regional framework contractors o Deliver ISO awareness training Cost of providing training: 3,000 Complete the procurement process for MSF3 o Award MSF3 and launch at MHA annual conference o Prioritise MSF3 aims and objectives and develop an action plan o Establish performance management working group o Further commissioning/sponsor training to be developed Development of new course material on NEC4, MSF3 and X22 to be included in learning and development programme Costs of evaluators time, expert advice, and training: 75,000 Expected deliverables: MSF3 to be launched at 2018 Annual event. Product and service satisfaction scores >8.5 Savings of > 15%. Total cost: 81,000 5

9 8.3 Professional services workstream lead Peter Barclay, Midlands Highway Alliance This work stream is responsible for managing the professional services partnership PSP2. In the third year of the framework 8m of work was commissioned through the framework, 20 out of the 21 MHA authorities used the framework, and by meeting contractual criteria it was extended for a fourth year. It has identified savings of 11%. The aim of the group for 2018/19 is to develop a replacement framework PSP3 that gives MHA members what they want, whilst avoiding the procurement pitfalls of the previous framework. The group also needs to manage the existing framework until it has reached the end of its fourth year. The activities planned to support this are: Procurement of PSP3 with the associated costs of soft market testing, evaluators, expert advice, and meetings Cost of procurement: 60,000 Management of PSP2 Cost: 2,500 Funding of collaborative projects such as BIM, funding toolkits, and carbon management Cost: 30,000 Expected deliverables: PSP3 in place by November 2018 PSP2 quality score > 8 savings of >10% Workstream cost: 92, Skills Community workstream lead Julia May, MHA Over the past financial year, the skills community has provided 15 learning opportunities, both face to face and online. These include both new Engineering Contract learning events, Project Sponsor and NEC4 Engineering Construction Contract transition in support of the users of the Medium Schemes Framework. Other events commissioned support the acquisition of technical skills to support maintenance, design and delivery. Over 480 MHA members, affiliated organisations and framework contractors have registered on the Learning Management System (lms), 23 member authorities have accessed and benefitted from the provision of MHA learning events and workshops. During 2017/18, there have been over 200 learners attending the face to face events and workshops, including 42 virtual learners accessing our on-line learning content 1. The 2017/18 savings accrued in MHA commissioning bespoke learning and development for our members and their supply chain is 27,905. The community exists to ensure that the workforce supported by the MHA is better placed to both develop and maintain the skills and expertise to meet its objectives. 1 virtual learning content replicating face to face content - negates the need to travel to a venue and learners access content at their own pace; content ensures learners are assessed as competent prior to accessing higher level training 6

10 This will be achieved by extending skills development by commissioning further learning and development opportunities that will also be available to associated and affiliated members. These will provide content to build workforce capacity and capability, provide networking and collaboration opportunities as well as continuing to meet the competencies outlined in the MHA framework. The actions planned to support this are: Develop the capacity of the workforce to have the knowledge and skills to adapt to business and client needs Cost: 24,000 Maintain the MHA learning and development culture that provides resources so that capabilities are recognised, used and enhanced Cost: 20,000 Provide learning interventions that support continuous improvement 2, promote the industry and attract a diverse workforce Cost: 8,000 Total cost: 52, Term workstream lead Stewart Corbett, Waterman Aspen The achievements of the Term Community Board include the introduction of a Cultural framework, and contributed savings of around 1m. The purpose of this Board is to ensure the alliance remains at the leading edge of term maintenance collaboration. It will do this by: Supporting, implementing and developing a continuous improvement model for highway term contracts to achieve convergence to best practice. Supporting and developing collaborations for highway activities, such as procurement and the embedding of partnering principles and construction best practice throughout the supply chain. Sharing best practice to enable member authorities achieve the recommendations of Well Managed Highways Infrastructure Code of Practice and improve DfT Incentive funding banding All the work done by this group, including the work stream lead role, is consultancy work carried out by Waterman staff using the PSP2 framework.. Planned activities 2018/19: Collecting the common performance indicators and integrate the common culture framework. Collate, analyse and present results to enable individual members to determine their areas of opportunity for improvement. Costs of benchmarking: 14,400 Support members to drive continuous improvement through best practice by focused lean interventions. Continue with the ongoing interventions started in 2017/18. Initiate further interventions focusing on core common activities Identify the efficiencies being generated and quantifying the savings made in full case studies. 2 Systematic maintenance, improvement and broadening of knowledge and skill 7

11 Continue (post Derbyshire CC) support to link the implementation of the collaborative charter and culture framework Costs of lean intervention and support: 63,700 Provide the Term Community Board interactive workshops (every two months). Update the RGSM toolkit with all outputs from 2017/18 Disseminate / share best practice Costs: 13,900 Expected deliverables:- a publically available set of key performance indicators (kpi) for the MHA indicators and the cultural framework, a published case study for each intervention, six Term Community Boards held Total cost: 92, Sources of income The Alliance has three sources of income: 9.1 Each member pays an annual fee, which is variable, predicated by the type of authority The fee is currently 10,000 for a shire county and 5,000 for a unitary authority. With the current 21 members this will raise 142,000, approximately 48% of the overall income. This income is reasonably reliable, with the main risks being the effect of the combined authorities that are developing, and the impact of any merger with MSIG. 9.2 Using the Medium Schemes frameworks incurs a charge which is around 0.35% of the value of the project that is delivered through the framework. This is expected to provide around 100,000 of income, but is very dependent on schemes being funded and alternative routes to procurement (such as SCAPE) not being used. 9.3 The third source of income is from the usage of PSP2 which incurs a charge of 1% of the value of the work carried out through the framework. That is expected to generate 80,000 in the coming year. Again the main risk is the level of funding available, but a subsidiary risk is the ability of the framework to respond to supply chain/skills needs which could affect whether authorities use it or not. 8

12 10. Overall Budget 2018/19 Table 3: Summary of income and expenditure 2018/ Anticipated income Membership Fees 140,000 Fees from Framework fees 180,000 Total income 320, Planned Expenditure costs Running costs ( 232,100) Staff 206,100 Communications and events 20,000 Governance and financial management 6,000 Workstream costs ( 377,500) Assets Standards and Commodities 60,000 Medium Schemes 81,000 Professional Services 92,500 Skills Community 52,000 Term Maintenance 92,000 Total expenditure 609, Estimated carryover from 2017/18 451,787 (as at 31/3/18) 10.4 Total surplus in funding 162,187 (i.e. reserve remaining) to carry forward to 2019/20 9

13 MHA Business Plan RAG rating March 2018 Workstream Indicator Assets standards and commodities Medium schemes Professional services Skills Community Annexe A Term Community Sharing innovation / efficiencies how many used by at least one other authority. Risk based approach workshop 16 different authorities Development of ISO relationship management plans membership of NACF BIM project Supporting RBAM and DfT workshops. Culture framework 3 authorities Increase of efficiency savings to expenditure. Not applicable Increased savings due to ECI Efficiencies estimated as 15% Marginal savings Now achieved 7m proxy savings Outcomes of an annual review to each authority seek to measure trend for increased usefulness, added value of the alliance and satisfaction of members. More joint services - increase on previous year and/or more authorities involved Annual survey indicates that RBAM and DfT Self- Assessment are highly rated. Involving MSIG authorities Not applicable. Business case for MSF3 is evidence of need for framework. Leicester City now using MSF Not applicable All 21 authorities now using PSP2 Annual survey indicates skills gap is an important issue. Increased number of authorities involved in training Not applicable Confirm work group Increase in training All events were learning opportunities NEC3/4 training Supporting ICE applicants Providing training for MSF workstream. TMCPM training Achieving business plan outcomes including total savings and non-quantifiable benefits Achieved Achieved Achieved Achieved Made target savings

14 Midlands Highway Alliance Communications Plan 2018/19 Annexe B A Summary and resources Research / background The Midlands Highway Alliance (MHA) was formed in 2007 and is a pioneer in collaboration with the highways sector. Members seek to achieve efficiency savings through collaboration. Membership has now grown to a total of 21, and it is expected that this growth will continue. Authorities can become members if they are in the midlands region or directly bordering an authority within the midlands region. The main aim of the MHA is for procurement excellence, as well as sharing best practice, making efficiency gains and delivering exemplary capital works, highways maintenance and professional services projects through framework agreements. Strategic governance of the Alliance is provided by a director-level Executive Board which meets twice a year and receives high level performance reports. It sets targets and agrees the Alliance Annual Business Plan. Operational direction is given by the Programme Board, which meets quarterly, and monitors the performance and delivery of the five active work streams, which are:- Medium Schemes (construction/infrastructure projects with no upper limit) Term Maintenance (contracts covering a variety of services for a period of time) Professional Services (e.g. engineering design services) Asset Standards and Commodities (e.g. salt) Skills Community (learning and development) The MHA is self-funding and as such operates independently. However, Leicestershire County Council acts as the lead authority, and employs the Alliance Manager, Framework Manager, Skills Manager and Support Officer. Resources and time for communications is a paid service.

15 Research / background Audiences Ongoing discussions with MSIG regarding merger opportunities. In the financial year 2016/17 the MHA remained self-sufficient generating enough income to support all of its activities. The 2017/18 annual report was produced in hard copy and distributed at the Annual Event which celebrated ten years of the MHA. The annual report was also uploaded to the website. Since going live in September 2017, the report has had 67 downloads (as at February 2018). With the introduction of both the Learning Management System (LMS) in mid and the Sharepoint document sharing facility coming online, the function of the MHA website has changed. Members may increasingly use it as a signposting tool to access SharePoint and the LMS. This will not diminish the efficacy of the website as the MHA public face, and showcasing the work of the Alliance to potential members. Public Sector: Highways and transport teams of county and city councils Councils elected members Individuals implementing procurement decisions Individuals working directly on projects i.e. engineers. Prospective new Alliance members Portfolio holders Educational establishments such as the Leicestershire Education Development Council (LEDC) Government departments Combined authorities Local government association Other: Public Other related groups on a project basis e.g. residents Skills / Education media Trade: MSF2 & MSF3 Contractors Current Term Maintenance contractors New contractors Sub-contractors Consultants Skills sector Highways Industry Construction skills Professional services providers Media: Trade press National Government media Local press associations.

16 Objectives Strategy To maintain and deliver a programme of communication to keep members informed of events and activity taking place across the MHA in order to foster improved relationships between members and generate increased opportunities for collaborative working. Increase attendance to groups, commodities and professional services workstreams. To raise awareness of the MHA on a local and national level and within the trade / sector, to make the MHA an attractive proposition, thereby encouraging new members to join hence increasing collaboration. To increase national sector awareness to gain industry recognition for best practise and be held up as an exemplar project, which will contribute to an increase reputational value of LCC and the MHA at a local and national government level. To facilitate an improved operation of the partnership by providing and maintaining communication resource tools for members, contractors and consultants. To improve efficiency and access to resources for MHA members by actively promoting SharePoint, the Learning Management System and the website. The key strategy will be to deliver communications in an appropriate and timely fashion. In the delivery of this strategy, targeted communication channels will be used to inform relevant audiences about key events and milestones. This year the MSF3 launch this summer will highlight the work of the MHA, and the success of MSF2 projects. Launch of PSP3 in October/November will be another focal point reflecting on lessons learned from PSP2 and consulting widely with industry. Articles/news could be generated demonstrating how innovation and best practice developed by the MHA that has become the norm for example, the use of NEC4 for the MSF Framework. Language will vary according to the audience, but will largely be technical to appeal to the trade and sector audience:

17 Strategy cont. Events, when they are considered to be an appropriate method of communicating and engaging with key audiences, will be held at times and venues which are relevant to the target audience. A range of tools will be used in the implementation phase, including Events, including main annual event in Sept. e-updates Workshops Annual report Media relations Case studies Project meetings Briefing notes (photo opportunities) MHA website Promotional materials where required Attendance at national conferences Key messages The MHA is an exemplar, leading the way in public services procurement in the highway sector Priorities The MHA is committed to collaborative working, sharing best practice and ways to expand the alliance Membership offers real benefits to the public sector by: o providing real opportunities for economies of scale and cost savings, whilst still providing a first class quality service to residents and other highway users o improving the speed of delivery of highway schemes o offering quality, trusted resources for the delivery of schemes and learning, training and development opportunities by working with the private sector, through a series of established framework contracts Communications priorities for 2018/19 will be: Annual report published by the end June 2018 Annual event September 2018 The development and launch of MSF3 Development and launch of PSP3 Awards enter and promote any awards received directly by the MHA and their involvement in awards received by partners Improve engagement with MHA members through e-newsletters and event updates Continued promotion of the website, calendar and LMS

18 Priorities cont. Continue to encourage the use of SharePoint by members Develop the MHA social media presence via Twitter and LinkedIn Developing & publishing case studies Business Plan published in March 2019 Development and expansion of Skills Community including LMS, workshop and learning, training & development opportunities Resources Evaluation Jacqui Wooldridge Communications Officer Martin Boonham Communications Officer Neil Santy Design Additional support from the Media team as required by Communications Officer Action: Number of sign-ups to the e-bulletin Events attendance Number of individuals using the website Sign-ups to LMS training sessions Number of users engaging with work stream leads specifically for documents or searching on SharePoint Number of case studies completed target 5 Response to annual questionnaire/survey target 8 Awareness: Hits to the website Number of downloads from the website or SharePoint Engagement with e-bulletin, click-throughs Feedback: Feedback/surveys after events Case study participation F:\MHA\8. Management Information\MHA Business Plan\ \Midlands Highway Alliance Communications Strategy final.doc

19 Midlands Highway Alliance Business Plan 2018/19 Fees and Subscriptions Annexe C A long term goal of the MHA is to be financially sustainable, and to achieve that, members agree when joining to pay the following fees:- Annual Subscriptions The current subscription rates are 10,000/annum and 5,000/annum. The subscription depends on the type of authority, with the higher rate applying to county councils and Highways England, and the lower rate applying to unitary authorities. A form of subscription has recently been approved for non-highway authorities who wish to use the frameworks made available by the MHA. This requires them to pay the annual subscription for only those years when they are actively using the frameworks. The level of fees is reviewed annually in March by the MHA Executive board as part of its approval of the MHA Annual Business Plan. Founder members first paid subscriptions of 5k (county) and 2.5k (unitary) in 2008/9. Since then the fees have remained static at 10k and 5k. Levies/Fees For all users of the Medium Schemes Framework the fees are related to the value of the work package (based on the initial target price) and also which lot is used:- o The proposal is to charge a single procurement and savings fee based on the value of the projects. o MSF2 Lot 1 projects up to 5 million the fee shall be 0.5% of the works value subject to a minimum fee of 2,500. o MSF2 Lot 2 projects over 5 million the fee shall be 0.35% of the works value subject to a minimum fee of 25,000 and a maximum fee of 42,000. o MSF3 projects the fee will be 0.25% with a minimum fee of 2,500 and no maximum. o These fees become due at the time the Package Order is awarded For users of the Professional Services Partnership the fee is a standard 1% of the total value of work charged through the framework to the member in question. These fees will be invoiced annually in February based on the total estimated outturn cost up to the end of the relevant financial year, less any previous year s payments.

20 Generally, fees for all other activities (e.g. commodity purchase) will be based on 10% of the predicted savings for members of MHA and, where appropriate, 15% for non-members. Usage Discount To encourage the use of the Medium Schemes Framework, the annual fee for an authority will be discounted by the amount of the framework levy due from that authority s usage of the Medium Schemes Framework. The maximum discount per year will not exceed the annual fee. Payment The MHA s finances are managed by Leicestershire County Council, and all invoices will be raised via its financial system. Annual subscriptions are due to be paid by 31 st March at the end of the year they are due. Fees for use of the Medium Schemes Framework are payable when the Framework Board has agreed the allocation of a package order to a contractor. They are calculated using the target cost contained in that package order. Members will be invoiced annually by Leicestershire County Council for the fee for use of PSP2 which will be based on the throughput report received from the PSP2 incumbent. Payment of other savings, such as those from commodities are payable when the saving has been made.

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