Agenda item

Report ENV696 from the Cabinet Member for Environment.

(Enclosure)

The Cabinet Member for Environment presented report ENV696 which concerned the Ground Maintenance Service which was currently provided through a contract with Glendale Grounds Maintenance Limited which would expire in February 2019.  The contract covered grounds maintenance services for all the District Council owned parks, gardens, public amenity grass areas and the Council’s housing related stock.

He reminded Members that the Committee had discussed the extension of the current contract for a further year at their meeting in December. The report explores other options for delivery of the service.  Due to the time constraints with the contract ending a decision needed to be made on how the service was provided in the future. 

Expenditure on Grounds Maintenance Services was significant with an annual investment of £1m over the last four years for General Fund (two thirds) and Housing Revenue Account services (one third).

In order to do a like for like comparison a huge amount of work had been done to split out and understand what the current contractors were contracted to do.

From the information available four options were outlined within the report:

·         Option 1 – contract out the service through competitive tender

This would continue the service as is with the process of producing a specification and associated documents against which suitable contractors would be invited to bid against.  Re negotiating the current contract would not be appropriate as other degrees of flexibility would be needed moving forward.

·         Option 2 – In-source the service utilising directly employed Council employees and Council owned equipment

The Council would manage the service directly employing its own workforce and investing in plant and equipment. Transfer of Undertakings Protection of Employment (TUPE) rules would also be a requirement.

·         Option 3 – Deliver the service through a SKDC Local Authority Controlled Company

The service would be provided in a slightly different way with a Teckal exemption where the contracting authority had sufficient control of a separate entity established to provide the service which carries out at least 80% of its activities for the owner authority. This would allow for a proportion of commercial revenue to be made.

·         Option 4 – Deliver the service through an established Local Authority Company

The service would be through a joint venture agreement with an already established joint venture company such as NORSE based in Norwich.  There would be some degree of benefit associated with this option but not to the extent of option 3.

In order to evaluate the delivery options a range of objectives for the service had been identified;

·         Cost

·         Flexibility and responsiveness

·         Income generation

·         Quality of service and performance

These had been evaluated and were shown in Appendix 1 to the report.  A graph showing the delivery option appraisal results was also included within the report.  It was stressed that this was a subjective analysis of the information known on a like for like basis.

Members noted that very little difference could be seen with regard to cost apart from option 3 and this was in respect of the commercial aspect.  Flexibility of the service was a key aspect and how resources could be diverted if the service was directly run by the Council.

It was also noted that if option 1 was the preferred route then costs would increase.  The extension of the contract for one year had resulted in a 4% uplift. Work done on behalf of Lincolnshire County Council (LCC) with regard to grass cutting verges had been extracted from the contract as they had made a material change to cutting verges from five to two.  LCC now had a contract direct with Glendale.

The Committee then discussed the options before them.  It was stressed that the information before Members had a subjective element across all areas and the scores given were based on the information available.

It was felt that either option 2 or 3 where the way forward and a Member asked about what capital costs were involved as they could be significant.  Capital costs were dependent upon the chosen option but an initial capital budget request of £400,000 was proposed.  It was stressed that any expenditure had to be value for money.    The Member proposed that Option 3 was the way forward.  Further discussion then followed with Members asking/commenting on the following;

- What commercial possibilities there were currently

- Possibility that parish councils would use the proposed service, following the success of the Big Clean

- To be mindful and not over extend ourselves too far, too fast

- Key to success would be the management of the service

- Option 3 gave the option to “look outside the box”

- How employees would be affected, terms and conditions (non Teckal)

- Depending upon profits, ability to move arrangements to a company

- Suggestions that areas to look at first would be in the public sector including parish councils, health authorities etc

- How a Teckal company would work with regard to profits and staff – it would be significantly different from Gravitas

- Flexibility in running the company ourselves

All Members agreed that option 3 appeared to be the way forward and the recommendation to propose this option as the way forward was seconded and unanimously agreed.

Recommendation:

The Environment Overview and Scrutiny Committee recommended that Option 3 - provision for the delivery of the Grounds Maintenance Service through a SKDC Local Authority Controlled Company be looked at as a way forward for the provision of the Grounds Maintenance Service.