5. THE ISSUE

5.1 This report informs the Executive of progress with the Council's Business Improvement Partnership with HBS Business Services Ltd, and seeks approval and endorsement to a proposed action plan and priorities for development of the partnership in 2004/05.

6. RECOMMENDATION

2.1 The Council Executive is asked to:

a) Note the progress made on the Business Improvement Partnership, including the findings of the Council's external auditor;

b) Endorse the transition review report and the closure of the transition phase. (Appendix 1)

c) Approve the summary action plan at Appendix 2;

d) Endorse the joint Partnership Board's agreed mission and objectives for the Partnership, against which future progress will be measured (Appendix 3);

e) Endorse the Partnership Board's priorities for the Business Improvement Service for 2004/05 (section 6.3).

7. FINANCIAL IMPLICATIONS

3.1 There are no financial implications arising directly from this report.

8. BACKGROUND

8.1 The Council initiated the "Paris Project" to engage a strategic partner in spring 2001. Through a series of structured procurement stages the Council reached the decision, in January 2003, to select HBS Business Services Ltd as preferred supplier. After contract negotiation the Council Executive authorised the completion of the Partnership Agreement with HBS in July 2003 and the Business Improvement Partnership became "live" on 4^th August 2003.

8.2 The Partnership covers the transferred services of ICT, payroll and HR administration, with around 70 staff transferring to HBS' employment in August 2003. However the Partnership also offers a new Business Improvement Service (BIS) offering the Council access to HBS skills and resources to develop and deliver projects, mainly with a technology driver, that raise the performance of Council services and/or improve their efficiency.

8.3 In authorising the completion of the partnership agreement, the Council Executive also authorised the establishment of a joint Partnership Board with HBS to oversee and drive the partnership. The Council is represented on the Board by the Executive Member (Resources), the Chief Executive and the Resources Director. The Council's representatives have been keen to emphasise the equal status of HBS' representatives and the importance of both parties having mutual objectives to be achieved through the success of the partnership.

8.4 The Partnership Agreement is for a ten-year period, and the initial six-month period has been one of transition. The Council's project management methodology was used to define specific tasks and outcomes for this period and a formal review has now been carried out. In addition the Council's external auditors, PriceWaterhouse Coopers, have completed a short review of the transition stage.

9. PROJECT REVIEW

9.1 The formal project review for the transition stage of the Paris project is attached at Appendix 1. The Council's objectives of the transition stage were to:

· Establish a communications and marketing strategy for the partnership

· Establish governance arrangements

· Develop and embed the Business Improvement Service throughout the Council

· Consolidate ICT service delivery

· Progress the transition of payroll and HR administration

· Ensure robust and clear financial arrangements

· Ensure robust and clear contract management arrangements

· Resolve outstanding HR issues

· Achieve project closedown

9.2 The PWC report highlighted a number of issues which can be summarised as follows:

The Development of a Partnership Strategy and a one year plan, to support the Partnership Vision.

© The payroll upgrade and establishing People Services are the key risks to the Partnership at this time. The success of these projects is critical to the future of the Partnership.

© As this type of partnership is novel and innovative there is an increased need to clarify the role of the Partnership Board in prioritising, authorising and signing off projects and in reviewing the progress and outcomes of projects and programmes.

9.3 The Partnership Board has reviewed the project review and PWC reports and has concluded that transition is largely complete, and that the Paris project can be closed. It considers that the transfer of services to HBS has been seamless and successful. Governance arrangements have been established and are working reasonably well. The Board however acknowledges that the partnership, as a "new" initiative, has yet to be as well integrated into the Council's day-to-day working as had been hoped, and that the Business Improvement Service is still at an early stage of development. Specific issues raised by PWC regarding the progress of the "Peoplelink" project were already being addressed by the Council's HR Service and HBS and the Board considers that considerable progress has been made in making the project robust.

9.4 An action plan has been prepared by the Partnership Board to ensure that findings from the project review and PWC reports are addressed. The key actions are:

· To prepare a 3-year partnership plan, to provide clarity and direction to the partnership and focus on mutual goals

· Continue to develop the Business Improvement Service as a key tool for continuous improvement within the Council and ensure its integration with other Council structures and decision-making arrangements

· Complete the formation of Peoples Services and the upgrade of the payroll/personnel system

· Finalise the definition and management arrangements for the Council's partnership client functions

· Ensure robust performance measurement systems

The summary action plan is attached for approval at Appendix 2. A copy of the full plan is available as a background paper.

10. PRIORITIES FOR 2004/05

10.1 As stated above, a key action is to prepare a joint 3-year partnership plan. This piece of work will be undertaken through the spring and summer 2004 for completion and approval by the Council Executive and HBS Board in the autumn. While the plan will have short-term deliverables, it will focus on the medium-term development of the partnership over the period 2004 - 2007 (the remainder of the Council's corporate plan period). In the meantime, in order to provide focus and direction, the Partnership Board have agreed initial priorities for the Business Improvement Service for 2004/05.

10.2 In formulating its priorities, the Partnership Board has, following consultation with the Council's Directors' Group and with HBS, developed a mission statement and a set of objectives for the joint partnership. It intends that the success of the partnership should be measured against the objectives, and the Council Executive is asked to endorse the proposed mission and objectives, as shown in Appendix 3.

10.3 The priorities for the Business Improvement Service are derived from the Council's corporate plan, in which the BIS is recognised as a key tool for organisational development. While it is not easy, nor necessarily desirable, to set a rigid definition of "business improvement" the Partnership Board is keen to establish a balanced programme of projects under three broad headings:

10.4 An initial project register is in place and, while this is acknowledged as needing development over time, a number of projects stand out as being "key" for 2004/05. It is anticipated that these will receive priority for the allocation of BIS resources during this year.

It should be recognised that the allocation of BIS resources merely enables a project to be developed to business case stage, enabling the Council to assure itself of its viability and achievability as a project. Funding for projects needs to be secured through the Council's own resources - via its financial planning process - or external funding. In agreeing the Budget for 2004/05 the Council allocated £1M in this year (and similar indicative sums for the two following years) for "headroom creation" and productivity improvement projects on an "invest-to-save" basis. This budget will enable projects that fit these criteria to be progressed in this financial year.

11. RISK MANAGEMENT

A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance.

12. RATIONALE

12.1 The rationale for the recommendations is detailed within the body of the report.

13. OTHER OPTIONS CONSIDERED

13.1 Not relevant to this report as this is detailing the progress to date of the project.

10. CONSULTATION

10.1 A copy of this report was sent to the trades union on 19th March. Any comments received will be reported to the meeting. Consultation has also taken place with the Directors' Group. The Resources O&S Panel considered the project review at its meeting on 1^st April and any comments to be fed back to the Executive will be reported orally.