Agenda item

AMEY SERVICE DELIVERY PARTNERSHIP COST CONTROL

To report on the provisions in place for the control of costs in relation to the Service Delivery Partnership with Amey.

 

 

Minutes:

The Highways Network Manager presented a report on the provisions in place for the control of costs in relation to the Service Delivery Partnership with Amey. He made reference to the key points summary on page 17 and drew the Committee’ attention to the key considerations with Amey which set out in detail the following:

 

(i)                  Existing Contracts with Amey

 

(ii)                How the payment mechanism in the existing contract services contract can be used to control costs and the support delivery of desired outcomes.

 

(iii)       How the payment mechanism in the existing consultancy services contract can be used to control costs and the support the delivery of desired outcomes.

 

(iv)              Existing Payment Processes

 

(v)                Improvements Secured through Service Delivery Review Negotiations

 

 

(vi)              Payment Process for Managing Agent Services

 

(vii)             Rationale for the Selection of Payment Mechanisms

 

(viii)           Future Financial Reporting Requirements

 

(ix)              Value for Money Review as part of the Annual Service Plan

 

(x)                Effective Strategic Client Team

 

 

The Chairman referred to instance where a member of the public might feel that a job could have been carried out for less money and asked how the more expensive job could be defended. The Highways Network Manager informed Members that there will be occasions when jobs for projects could be carried out for less money. However, the overall cost of a service would need to be evaluated and it would be necessary to ensure that corporate standards are met and the risk element has been properly managed by the Council and partner. It would also come down to overall value for money.

 

The Director of Culture and Environment informed the Committee that where the Council passes the responsibility for road conditions to the partner, the partner would receive a lump sum of money and if jobs were not done properly, the partner would have to go back and do the job again at no extra cost to the Council.

 

A Member asked if the parish maintenance plan still existed and how would the partner get feedback from the parishes.

 

The Highways Network Manager stated that the Parish maintenance plan was still in operation and that arrangements were in place so that parishes would receive routine maintenance visits. In terms of feed back from parishes, all parishes had received an Amey contact list and the parishes would complete a monthly return which would be sent direct to Amey. He would circulate the Committee with a copy of the list.

 

A Member asked that the position of Property Services be clarified. Also, how did the  partner select  contractors since there was not a section in the report explaining this issue and how were costs arrived at for work carried out by subcontractors. The Member also asked if Internal Audit was satisfied that Amey were doing sufficient work themselves and where contractors did not satisfy the Council’s criteria, would they go direct to Amey to do the work.

 

The Director of Culture and Environment informed the Committee that Property Services had been excluded from the review by the previous Director of Resources.

 

The Chief Internal Auditor informed Members that there was some work to be carried out around Amey on the Audit Plan. There was a line where Audit Services would carry out a review around Amey and this would pick up the concerns of Members.

 

The Highways Network Manager stated that the main contract with Amey stipulated how subcontracted work is priced therefore the same transparency would be seen with the subcontractors. Because of the fact that in many instances the pricing was derived on a schedule of rates, the price for works is set by contract and Amey take on the risk and must supply financial information as if they were carrying out the work. Also, Amey must display to the Council the direct cost of employing the subcontractor which indicates the price by unit cost.

 

The Director of Resources informed Members that as a consequence of Property Services being excluded from the review, he had carried out a management review and he had carried out a repositioning of Property Services in that any review should be done by Council staff. However, with shared services and value for money being issues, the repositioning of Property Services would not be carried out until those issues were reviewed.

 

The Vice-Chairman referred to the Amey in-house value for money report which would go to the Strategic Partnership Board. He requested an explanation of the provision and process for periodic bench marking of consultancy and works delivery cost against generally prevailing external rates. The Director of Environment and Culture indicated that he would provide the information following the meeting.

 

The Vice-Chairman also referred to potholes and the supervision of such work and asked was there was a quality control system in place. The Highways Network Manager stated that Amey had to do this through performance indicators. He did not see the role of his team as supervisory in that work. His team had the ability to carry out any audit inspection on Amey’s results. If areas such as potholes did show problems there would be a review and appropriate investigations.

 

The Chairman requested assurance that the Council was getting value for money.

 

The Director of Environment and Culture informed the Committee that it was important to note that to supervise everything was expensive. What was in place regarding the receipt of endless complaints would ensure that Amey would not get an extended contract. The Council also has the ablility to look at any issue but the Council did not have the resources to constantly supervise all areas where issues may arise.

 

The Vice-Chairman requested that the officers must make it plain to all Members and Parish/Town Council’s Members that the Council cannot look at all the issues and, therefore, that the public must be the eyes and ears of the Council.

 

With regard to a Member’s question relating to the Council’s 20% capital share holding in Amey, the Director of Environment and Culture informed Members that the original brief was to dispose of the 20% stake but at the moment it was clear that it was to the Council’s advantage to hold onto the 20%.

 

A Member stated that at a Scrutiny Committee meeting that morning, it had been stated that there was a wealth of Architects in Herefordshire who were not being used on contracts in the county.

 

The Director of Environment and Culture informed Members that specialised Architects were employed to carry out specialist work.

 

A Member asked about the updating of the Amey work schedule and was the schedule flexible to take on board work from Section 106 agreements. The Highways Network Manager stated that whilst the work programme is drawn up at the beginning of the year, the programme was subject to change which would allow section 106 matters to be taken into the programme as soon as possible.

 

In answer to a Member’s question, The Highways Network Manager informed Member’s that the arrangements with Amey are very focussed in that when a job is specified it would be on quality as well as quantity and, therefore, outcome.  He gave an example with regard to highway matters that specifications it would build in like for like repairs.

 

The Vice-Chairman referred to paragraph 34 of the report and the opportunity to review invoices and requested that Internal Audit ensure the adequacy and competency of the invoice arrangements. The Chief Internal Auditor gave an assurance that would happen.

 

 

RESOLVED: That the report be noted.

 

 

 

 

 

 

 

 

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