Meeting documents
Cabinet
Wednesday, 7th April, 2004
Bath and North East Somerset Council and HBS Business Services Ltd
Business Improvement Partnership
Project Review Report (Stage 7)
The purpose of this report is to
· Document any outstanding issues from the Project and provide recommendations for their resolution.
· Produce an action plan for the development of the partnership post transition.
· Formally agree the sign off of the Projects transition phase (Stage 6)
The report contains a number of appendices which provide detailed background material. This is to ensure the report itself is brief and succinct.
Background and Introduction
The Council embarked on this procurement process initially in April 2001. In January 2002 the Council agreed that it should invite three bidders ITNET, SX3 and HBS to make detailed proposals within the aim of forming a long-term Public Private Sector Partnership.
The Council followed a unique process acknowledging that it needed to be innovative in its approach. It set clear objectives for what it wanted to achieve and principles for how it wanted to work in the future. The objectives led the companies towards looking at how the Council could translate its business needs through technological and process changes into improved service delivery.
In January 2003 the Council Executive received the results of the three proposals and chose to appoint HBS Business Services Ltd (HBS) as its preferred supplier.
HSB had carried out extensive research of the Council and engaged fully with the Council and with a wide range of services and demonstrated the potential to make a good long term partner.
In July 2003 a report went to the Council Executive authorising the completion of the Partnership Agreement.
The Partnership Agreement and Negotiation Process
Negotiations were led by the Council in conjunction with it solicitors Eversheds and two advisors, PKF for the financial and overall business deal and NCC Group for IT advice. The period of negotiation leading up to the signing was intense and completed within a very tight timescale. This led to a number of items of detail outstanding still to be agreed between the parties. A further period of due diligence was therefore agreed between the parties to be three months following the date of the agreement. The Partnership agreement was signed on 1st August 2003.
Objectives of the Project
The scope of the project covered the planning, managing and controlling of the Initiation to negotiate document, tendering, selection, negotiation, transition and completion connected with creating a viable partnership with an external party.
During the project it was necessary to write a set of objectives for the partnership by which its success could be measured. One of the questions in this review is to ask whether the Council has met the objectives of the Project.
At this stage it is too soon to say whether they have been achieved but the processes and framework to do this have been established during transition.
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Partnership Objectives |
How we will measure this? |
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Improve service provision to residents and customers; |
To early to identify measurable beneficial impacts. There are a range of planned and approved projects that seek to improve access to and responsiveness of public facing services. To date there have been no negative impacts. |
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Equip the Authority to deal readily with change, and to manage and mitigate risk |
Arrangements are in place to monitor day to day activities as well as project management. These arrangements include the integration of Partnership management into the general management arrangements of the Authority thus enabling rapid response to requirements to change |
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Improve the Council's ability to develop appropriate Information Systems and Strategies |
Robust monitoring arrangements are in place to track the IT spend for the Council. HBS are responsible for all IT procurement. |
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Improve the efficiency and effectiveness of all services (both transferred and retained) |
By introducing the Business Improvement Service discipline all IT projects will be tracked and monitored to ensure they are responding to a business need and are scalable. |
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To ensure that substantial and measurable value is added to those Council services which are included in the partnership. |
To early to identify measurable beneficial impacts but performance management processes are in place to monitor added value |
Objectives of Transition
The transition period was detailed in the Partnership Agreement as a period of time by which `the Partner and the Council shall use reasonable endeavours to establish the processes, relationships and culture which will foster the growth of the strategic partnership between the Council and the Partner characterised by innovation and structured, programmed and well managed continuous improvement' (12.2.2)
Both parties wrote separate transition plans and a joint transition group was established to oversee the activities.
The Council's transition project team developed high level objectives for its transition period backed up with a detailed resource/task plan (Appendix C) There are a few tasks still outstanding which are detailed in Appendix D. The transition period was successful overall in meeting these objectives. The PWC audit of the transition detailed in Appendix E also reviewed the objectives and progress to date.
A summary follows of the main points covered under each objective.
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Objectives |
What have we done |
What is left to do |
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· Establish a communication and marketing strategy for the partnership as a whole |
· A joint communication plan was developed which led to the regular production of newsletters informing Council staff of the latest developments. A separate newsletter was developed for the PeopleLink project. · Presentations to Directors Group and Head of Service have been made to enable them to understand the Partnership arrangements. |
· A further plan is needed which will take into account the comments received from the recent PWC audit report. See Action plan at Appendix F · Prepare a post transition communication plan to include presentations and training for all stakeholders. |
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· Establish BIP framework and arrangements |
· The following groups to manage the partnership were established early in transition. o Partnership Board o Contract Monitoring Group o BIS Development Group o BIP Service Delivery Group o Joint Transition Group They all have agreed terms of reference and a clear reporting structure. They have all been meeting monthly and part of their remit is to review the frequency and objectives of their meetings. · Significant work has been undertaken by the transition team to support these groups. · A mission statement has been produced for the Partnership (Appendix xx) by the board. · A regular contract monitoring report is produced by HBS showing their performance against the key performance indicators listed in the partnership agreement. · ITCSG has transformed to a Service Delivery Group focusing on the contractual SLAs and performance issues around the partnership. It is the main link back to the services for the core services. Its membership has been expanded to include HR professionals. · The day to day contact for the partnership has rested with the transition team who have then coordinated the responses · The service review process was agreed for the next financial year. This year an investment plan was produced independently by HBS to deal with immediate issues |
· Moving forward from the Partnership mission statement develop an Overall Partnership Strategy to achieve greater engagement and commitment from both parties towards the partnership deliverables. · Prepare a one year plan from the Partnership Strategy which sets out the key objectives for the year · Ensure all governance arrangements are reviewed and understood by both parties to the partnership in line with the partnership strategy · Rationalise sub-group arrangements by reviewing the terms of reference for the Joint Transition Group and the Contract Monitoring Groups and merge them into a single Partnership Co-Ordination Group to oversee the next steps of the partnership. |
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· Develop and embed BIS mechanism for continuous service improvement throughout the council. |
· A Development Group was established in December 2003 to monitor and allocate the resources within BIS under the delegation of the Partnership Board. · A project register has been produced which lists all current projects that the Council aspires to complete. · Workshops have been run with Directors Group to communicate the BIS process. · The Development Group are working through the project methodology templates at each meeting to agree format and content. · Support to the group has been given by the transition team. · Initial projects detailed in the contract have been progressed during this period. These included Managed Print Service and Procurement. · The initial resource allocation of BIS days, management and reporting arrangements were put in place |
· For the partnership to be more than just good core service deliver it is important that the BIS is working properly. Their role needs to be clarified and understood in terms of the overall council change agenda and how it relates to other groups within the council. Their success criteria should also be defined. |
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· Consolidate ICT service delivery |
· The initial management and reporting arrangements were agreed. · The methodologies for ensuring the Council is receiving the information it needs for recharging have been designed. · A sub group was established to review the key performance indicators in the contract and ensure they are appropriate to provide the groups with the information needed to measure the partnership. · A further group has now been set up to review the Systems SLAs currently in place and the charging mechanisms around these. |
· Ensure all new and existing ordering, commissioning, and charging processes are documented and communicated to services. |
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· Progress HR admin/Payroll transition towards clear goals |
· The People Service transition has been managed jointly by HBS and the Council. The Partnership Board have identified this as a key project and receive updates at each meeting. · The baseline agreed at the date of signing the contract was reviewed and this lead to a change in the core price for HR administration. · The staff transferred with effect from the 4th August. · All PeopleLink staff are moving to one location in Riverside. · The day to day responsibilities for the HR retained managers are documented and agreed by both parties. |
· Track the ongoing delivery of the PeopleLink projects as a key measure of the partnership's success |
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· Ensure robust and clear financial arrangements |
· A revised accounting structure has been devised for the Partnership. · Volume monitoring arrangements have been agreed and a Price Performance mechanism in place. · Considerable time and resource has been spent by the transition team and finance personnel in establishing procedures, understanding costs and agreeing baseline figures with HBS. This has affected both IDS and PeopleService. · Meetings have taken place between the audit sections of both parties to develop a smooth programme of review work |
· Development of a Partnership Risk Register. · Ensure Internal Audit have documented arrangements for audit reviews · Internal SLA charging mechanisms have been highlighted as a key issue for the partnership to resolve. This will enable Council services to understand the value and level of resources they receive from IDS. |
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· Ensure robust and clear client and contract management arrangements |
· During the transition phase all client and contract management issues have been raised, discussed and solved by the relevant partnership group. The transition team have been involved in coordinating this approach. · Detailed knowledge of the contract is still mainly held within the transition team. · The Partnership Board has been keen not to put in place onerous client arrangements until all the contract monitoring roles have been detailed. This is part of the action plan for the next steps. |
· Client roles need to be defined but ways of working will need to evolve and develop. External client arrangements need to be agreed and implemented. · Ensure the need for ongoing partnership support is resolved. · The work in progress to assess the effectiveness of the KPIs and the SLAs should be considered by the Partnership Board to ensure that they continue to reflect the key priorities and objectives of the Council and the Partnership and are communicated to the Council. · Ensure adequate external IT advice is available to the Council when necessary |
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· Resolve outstanding HR issues |
A joint HR protocol has been agreed and communicated throughout the Council establishing the principles of their joint approach to people management issues and aimed at maximising the potential of both organisations through a flexible and joint approach to working. Further HR issues are being incorporated into the PeopleLink project. |
· Health and Safety issues still to be resolved around sharing of information |
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· Achieve project closedown |
· The transition phase was the final stage of the Paris Project. This has now finished and any outstanding issues are carried forward to the next Phase of the Partnership, to be known as "consolidation". |
· Review of the Paris Project from a council VFM point of view. Look at the learning points from this type of project. Arrange a workshop with the key contacts and people involved in the project to understand what worked well and what could be improved. This could then be circulated through the council to consider. The next step as the Project is now formally closed is to consolidate all the learning and actions in to the day to day running of the contract. This will need a period of consolidation to ensure that all client and contractual duties are understood and in place. |
Current Status
It is too soon within the partnership to fully assess the benefits to the Council of this procurement process both in terms of added value and financial benefits.
The budget for the project was originally set at £600,000. At the Council Executive in July 2003 a further £100,000 which had been earmarked for the project was drawn on to take the project to the end of transition.
The end balance overspends by £164,866. The budget is £764,220 against an actual spend of £929,086.
The overspend is mainly due to the cost of advisors. As the partnership agreement was original it wasn't appropriate to use any existing templates that have been written before either within B&NES or the marketplace in general. B&NES had the bulk of the legal and advisors costs as it instigated and owns the agreement. The total bill for external advice throughout the project and negotiation was £489,407.
Value Added Achievements from the Project which have been achieved to date
· Established and used standard Project Management methodologies which resulted in the project team meeting all the various contractual deadlines.
· Established robust business case development methodologies. These are being developed further and will be introduced to the Council through its corporate project methodology process.
· Helped the Council to gain a greater understanding of the number of projects running within the Council.
· Established clear linkage between council priorities and IT developments
· Developing a greater transparency, understanding and control over IT spend.
· Seamless transfer of c70 staff and no loss of service standards during transition
· Governance arrangements are now fully in place
· Extra injection of HBS management and specialist resources
· Greater understanding of the issues facing the council in achieving business improvement.
· Identified need to control and manage resourcing capacity issues on all project developments
· Identified and provides a mechanism for managing project overlap/interface and conflicts.
· Established a process for monitoring agreed predetermined outcomes and deliverables.
HBS Transition
To follow.
Price Waterhouse Coopers Audit Report of the Transition Period.
Throughout the project the Council's external auditors have reviewed all the documentation. Just before the contract was signed the Council changed its auditors to PWC. As part of their audit programme PWC undertook an audit of the project concentrating on:-
· the progress of the BIP in terms of the adequacy and effectiveness of the transition, governance and client side arrangements and;
· the Vision, e.g. intentions and priorities, following transition, from both a B&NES and HBS perspective
The report makes a number of recommendations that have been considered by the Partnership Board and will be transferred into an action plan. See Appendix 2