To provide an update on the services provided by Balfour Beatty Living Places (BBLP) during the first year of the council’s Public Realm contract to enable the committee to provide feedback to Cabinet and inform the work of the Task and Finish Group which has been established to examine this area in more detail.

The Assistant Director Place Based Commissioning introduced the report, his comments included:

 

i.           The Public Realm Services Contract (the contract) was the council’s largest service delivery contract by value and scope, with annual expenditure expected to be in excess of £20 million.

 

ii.          Balfour Beatty Living Places (BBLP) was awarded the contract following a major procurement exercise.  The contract had commenced on 1 September 2013 for an initial period of ten years, with options to extend for up to ten further years.

 

iii.         It was a high profile area of work and it was essential that service delivery and management of the contract was correct and value for money obtained.  Therefore, the Assistant Director welcomed the opportunity to reflect on the first twelve months and to consider opportunities for improvement.

 

iv.        Council and BBLP staff involved in the contract were introduced.

 

v.         Attention was drawn to the following points:

 

·                The contract was designed to focus upon the delivery of highways and directly related services.  The contract was based on the industry standard, New Engineering Contract (NEC), used by many councils.

 

·                The governance and contract management arrangements were outlined which sought to ensure the appropriate level of management overview and to build a strong partnership that was outcomes focused.

 

·                The relatively rapid mobilisation period was followed by some of the worst winter weather on record.  It was commented that the winter response and subsequent highway maintenance improvements had made a real difference to road conditions across the county.

 

·                It was commented that the level of response to reductions in service in terms grounds maintenance had been misjudged.  The position had been reviewed during the summer and resources had been increased to respond to public concerns.

 

Mr. Andy Williams, Contract Director at BBLP presented the company’s update document (this was appended to the report), the principal points included:

 

Contract start

 

1.         It was considered that the six week mobilisation had been undertaken effectively, with BBLP operating from the start with full emergency response teams.

 

2.         Further to the positive severe weather response, BBLP had helped the council team to secure £3.3 million from the Bellwin scheme and £3.5 million from the severe weather recovery scheme.

 

Rethinking the way we deliver the service

 

3.         The budgets had changed significantly from the previous financial year, with reductions in revenue budgets but increases in capital budgets. 

 

4.         BBLP had completed Herefordshire’s first Annual Plan for public realm services, setting out the services that would be delivered and the outcomes that communities should expect.

 

Starting the process of culture change

 

5.         A full organisational restructure had been undertaken, resulting in five new teams: Commercial and Finance; Design and Build; Operations; Knowledge Centre; and Locality Team.

 

6.         Although some positions in the new structure had yet to be filled, a full set of thirteen locality stewards were now in place.

 

What have we achieved in the year

 

7.         The severe weather had an impact upon roads already in poor condition, with over 67,000 defect reports identified from inspections and customer reports since the start of the contract.  Response times to Category 1 defects had been very good but performance in terms of Category 2 had not been as consistent but there were plans to address this.

 

8.         Winter temperatures had been relatively mild, with the number grit runs down to around two-thirds of normal levels.

 

9.         There had been a reduction in the street cleansing budget and resources had to be moved to a needs based approach.

 

10.      The spend on grounds maintenance initially went down by about half, resulting in a much reduced service and significant public reaction.  It was acknowledged that service changes had not been communicated early enough and better information could have been provided about the revised schedules.  A consultation was to be undertaken on future grounds maintenance plans.

 

11.      One of the biggest successes had been in delivering the investment and improvement programme.  The programme had included engagement with local stakeholders and parish councils on the proposed schemes, with many of the 85 responses directly resulting in refinements to the plans.  It was noted that the surface dressing programme had received a lot of positive feedback.

 

12.      Positive feedback had also been received about the locality stewards.  Recognising the importance of effective communications, locality stewards were regularly providing updates and issuing newsletters for each area.

 

13.      BBLP was working actively with a number of local organisations and groups.

 

14.      The lengthsman scheme had been reviewed and was being developed to enable more work to be undertaken on the local network.  Brian Barrett, clerk to Foxley Group Parish Council, provided an overview of enhanced lengthsman scheme trial in his area:

 

·                A pothole problem had been largely eradicated, with 53 defects repaired on 17km of carriageway in the last three months.

 

·                The appointment of the locality steward had been a catalyst for change and the start of genuine two way dialogue between the community and BBLP.

 

·                Previously, Category 1 and 2 defects had been dealt with but smaller potholes were left unattended and would degrade subsequently.  The lengthsman could target these emerging defects and this might result in savings in the longer term.

 

·                A number of issues had been identified during the pilots which would inform the wider roll out of the scheme across the county, including: administrative challenges; safety requirements; and durability of materials.

 

·                The scheme was described as a ‘win-win’ for all: for the council, an obvious issue was being tackled effectively; for residents, it was clear that action was being taken; and for BBLP, defects were being repaired and drains were being cleared before becoming more serious problems.

 

15.      BBLP was committed to contributing towards the regeneration of the local economy, for example: it had supported the council in its successful bid to the Construction Industry Training Board for National Skills Academy status; local sub-contractors were used where possible, current spend excluding surfacing was over 50%; and volunteering opportunities were available for its employees to support community activities.

 

What next?

 

16.      The key drivers included culture change, to be more responsive and customer friendly, and improved processes, to become more effective and efficient.

 

17.      Mr. Williams commented that the contract was flexible and ‘open book’, so it was incumbent on BBLP to demonstrate continually that it was providing value for money and that this was being obtained from sub-contractors.  He added that performance indicators were also visible and transparent.

 

The committee asked BBLP representatives and council officers to respond to a number of questions, the main points arising included:

 

a.         Mr. Williams said that a merger proposed by Carillion had been withdrawn, nevertheless it was not considered that any change of ownership of BBLP’s parent company, Balfour Beatty, would affect local contract management and service delivery; it was noted that BBLP’s partner consultants, Parsons Brinckerhoff, was to be sold.

 

The Head of Highways and Community Services explained that the contract contained mechanisms to manage performance and sanctions could be applied if necessary.  The Assistant Director added that the current contract was very different to previous public realm services arrangements.

 

b.         The Assistant Director confirmed that the scoping statement for the proposed task and finish group (appendix 2 to the report) was an initial draft and members could decide to include consideration of the procurement process.

 

c.         The Assistant Director said that the enhanced lengthsman scheme had been for a trial period during the summer and feedback on the scheme would be welcomed.  It was reported that a Cabinet Member decision was due to be taken in autumn 2014 on the potential extension of the scheme for the next financial year; some of the issues to be considered included the resources that could be committed, both by the council and parish councils, and the scope of activities that could be undertaken.

 

The Chairman said that, from his perspective, the lengthsman scheme had been very successful in providing greater local control and speedier responses.  He felt that wider implementation should be pursued, subject to satisfactorily addressing the finance issues.

 

d.         Mr. Williams advised that sub-contractors were required to go through a stringent process to ensure that they had the right procedures and approach to health and safety; assistance was provided to smaller operators and individuals to enable them to become part of the supply chain.  Whilst supportive of local contractors, BBLP had to be mindful of costs and in some instances had introduced out-of-county contractors to bring rates down to acceptable levels.

 

e.         In view of the significant increases in capital budgets, it was questioned what assurance could be provided to the public that value for money was being achieved on all schemes.  In response, Mr. Williams advised that most of the work was sub-contracted and, therefore, put out to tender.  BBLP sought to balance the best of the supply chain prices; for example, road resurfacing work was split geographically to reflect the competitive rates obtained for different parts of the county.  Using the example of the street lighting project, BBLP worked closely with council officers to get the right balance of specification and prices.

 

The Interim Procurement Manager gave an overview of the range of activity undertaken by the council to monitor BBLP’s approach to delivering programmes of work, including: a target cost mechanism; assessments of the risks that needed to be managed; examination of invoices and works being undertaken, with the support of internal engineers; access to BBLP’s computer systems; and external benchmarking with other organisations.  Further to this, an external resource was about to supplement the team to examine costs independently and forensically.

 

In response to a question from the Chairman, the Interim Procurement Manager confirmed that BBLP received a standard management fee of 9.83%.

 

f.          The Head of Highways and Community Services briefly explained the processes for the adoption of new highways and open spaces and how these were introduced into the forward programme and included in the contract.

 

g.         The Assistant Director advised that the telephone call centre remained with the council and the customer services team were aware of feedback about out-of-hours provision.  It was reported that the council and BBLP were exploring different ways of managing queries and had undertaken a lot of work to improve system connections and information available on the council’s website.

 

h.         A member in attendance commented on: negative public perceptions resulting from the use of out-of-county grounds maintenance sub-contractors; the need for greater local involvement in prioritising grounds maintenance, perhaps through the locality stewards; the duties undertaken by locality stewards needed to be appropriate to the role; the potential for grass cutting teams to deal with issues simultaneously, such as tree trimming, weeding, and cleaning gullies; it was questioned whether insurance claims had reduced as a consequence of investment in fixing the roads; and it was suggested that a different approach be taken to Category 1 defects to enable higher levels of response to Category 2 and other defects.

 

Mr. Williams advised that: the subsequent demand for additional capacity for grounds maintenance could not be met entirely within the local supply chain given availability and pricing issues; locality stewards would only fill potholes in exceptional circumstances; he would take on board the issue of the multi-skilling staff but this needed to be balanced with other competing demands; and revisits to potholes was understood to be in a low percentage.

 

i.           Mr. Williams said that, to maximise corporate learning, the company held operational and business improvement meetings for the entire business, and design team staff moved across areas to gain experience in different environments.  He added that, when the local supply chain became constrained, BBLP had utilised contractors from other areas.  It was reported that there was dialogue between teams about improving highways maintenance delivery.  The committee was advised that the Herefordshire contract was one of the more progressive contracts in the country, especially around local engagement.

 

j.           Mr. Williams advised that locality working in Wiltshire was very different to that in Herefordshire, nevertheless it was understood that lessons learned from the mobilisation in Wiltshire had informed the mobilisation in Herefordshire.

 

k.         It was recognised that slippage and changes to grounds maintenance schedules had to be communicated properly in order to maintain credibility.

 

l.           The Assistant Director said that officers would ensure that the schedules appended to the BBLP Public Realm Annual Plan were available on the council’s website.

 

m.       The Assistant Director reported that the savings arising from grounds maintenance reductions had initially been projected to be around 50% but, with spend subsequently increased, this was now likely to be in the region of 25%.

 

n.         The Interim Procurement Manager advised that the contract monitoring team was having conversations with BBLP about grass cutting performance and schedules.  It was noted that the Annual Plan would clearly define the performance indicators going forward.

 

o.         The Assistant Director explained the background to the grounds maintenance reductions and the circumstances which prompted a revised approach.

 

p.         The Assistant Director acknowledged that the mobilisation period of six weeks might seem a relatively short but essential services had been delivered from day one.  Although he had not been involved in the mobilisation himself, Mr. Williams understood that BBLP had achieved what could be reasonably expected within the six weeks.  An overview was provided of the ‘Confirm’ software used by BBLP to manage and maintain the highways assets of the contract and potential future functionality.

 

A committee member suggested that it would be important for the task and finish group to hear the experiences of operatives, in addition to management representatives.

 

q.         In response to comments about flood prevention, Mr. Williams said that there were programmes for drain and gully clearing and street cleansing but re-iterated that, as budgets would be more restricted than in previous years, a needs based approach would have to be taken.

 

In response to a question from the Chairman, Mr. Williams confirmed that the recording of drains and gullies was a work in progress.

 

A member commented on the importance of local knowledge and said that engagement with landowners was essential.  The Chairman noted that guidance notes on landowner responsibilities and on ditch and drainage clearance were to be issued shortly.

 

r.          The Assistant Director said that CITB accreditation was a major achievement which would require all the council’s main contractors to deliver training and employment opportunities.

 

s.         In terms of managing public expectations, Mr. Williams re-iterated the consultation to be undertaken and the Cabinet Member Transport and Roads said that historic levels of service could not be maintained and communities needed to be empowered to be less reliant on the local authority.  The Cabinet Member acknowledged that good communication was vital and, whilst the council and BBLP were working together on this, all councillors had a role to play in raising public awareness.

 

t.          The Assistant Director noted that highways maintenance was an important issue, both nationally and locally, and would remain a priority.

 

A committee member welcomed the enhancement of the lengthsman scheme and suggested that this could include grounds maintenance activities for those local councils willing to participate, subject to appropriate funding arrangements.

 

The Chairman said that a number of the issues raised would be examined in greater detail by the task and finish group.  The committee agreed the following addition to the scoping statement recommended by Councillor Wilcox: ‘To determine compliance, or otherwise, with the council's requirements in relation to responding to complaints and queries and to determine the accountability and contact arrangements of management at Balfour Beatty.’

 

The Chairman thanked the representatives of BBLP, council officers and members for their contributions to the debate.

 

RESOLVED:  That

 

(a)       The report be noted; and

 

(b)       Subject to the additions identified above, the draft scoping statement for the task and finish group be agreed and the group be established to examine this area of service.