Decision regarding the future operating model to enhance service delivery.

Cabinet resolved that: 

That under section 100(A)(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Schedule 12(A) of the Act, as indicated below and it is considered that the public interest in maintaining the exemption outweighs the public interest in disclosing the information. 

3. Information relating to the financial or business affairs of any particular person. 

PUBLIC REALM SERVICES

The Cabinet considered the Public Realm Services report, full details of which appeared before the members and group leaders in their agenda packs. 

The Cabinet member for Community Services and Assets introduced the report.  The contract was awarded in 2013 and delivered highways, traffic management, public rights of way, parks and open spaces, street cleaning and street lighting.  The contract model was heavily outsourced with the Council retaining a small client and contract management function.  Public rights of way and traffic management services were brought back in house in 2021. 

The contract term is until 31 August 2026. An enhanced contract management team was introduced to improve control and performance of the contractor but despite improvement in recent years a further review concluded that the current contract model will not deliver the services to the Council’s current requirements.  The prospect of modifying the contract with BBLP was assessed to establish new processes and procedures that became known as the Future Operating Model (FOM).  However legal advice concluded that the degree of contract modification required to instigate the FOM would not be permitted under procurement regulations. 

Therefore it has been agreed with BBLP that the contract will not be extended and will end 31 May 2026 and the Cabinet member supported the recommendation for the Council to serve the two year no fault termination notice effective from 31 May 2024.  A further report would be brought back to Cabinet in June 2024 regarding the future operating services.  Noted that both parties are committed to working together for the remaining term of the contract to ensure a smooth transition to the new arrangements from 1 June 2026. 

Cabinet member for Finance and Corporate services commented that in paragraph 28, the proposed additional funding for the project costs is fully funded and costed from the ear marked reserves balance.

Group leaders gave the view of their groups. The leader for the Green party thanked Cabinet for confirming they will amend the wording relating to the consultation with them and confirmed they were happy for this matter not to be called in at this point.  Noted that this matter will be looked at in detail and scrutinise all the steps going forward. It was confirmed that Independents for Herefordshire supported this decision, its reasons and why it was being held in closed session.  It was requested that the timeline doesn’t slip when the next report comes forward in June and there be a continued focus to progress matters through to 2026 when the contract ends.  It was commented that there is still a lot work to be done for the Council to become a good customer and how the contract operating model will function.  Noted that the change in the balance of work in house will require upskilling and bringing in people with the right skills.  True Independents supported the recommendation as they noted there had been long term dissatisfaction with the performance of the contractor.  It was queried what other companies are available that can provide this service.  The Liberal Democrats supported the recommendation and requested that the Council do things differently to avoid a repeat of previous poor performance. They requested for a local input into the contract going forward. 

In response to comments and questions from group leaders it was confirmed that this matter will be scrutinised and the Council will benefit from it being scrutinised.  The group leaders were thanked for their support and it was confirmed that market engagement has commenced as part of the procurement process and Cabinet are confident there will be significant interest in the contract but at this stage no formal approaches have been made.  It was noted that the current contract hasn’t worked because the terms of the contract have not clearly identified what the Council expected to be delivered.  However it was noted that now is the time to put forward what are the Council’s expectations for the new contract and requested input from everyone. 

It was reiterated that the item remains confidential until there is a press release on Monday 29 April. 

It was unanimously resolved that:

a)     Cabinet agree to the termination of current Public Realm Service Contract with Balfour Beatty Living Places (BBLP) bringing the contract to an end on or before 31st May 2026;

b)     Cabinet delegates authority to the Corporate Director of Economy & Environment

i.                  to serve the 2 year no-fault written notice on Balfour Beatty Living Places to bring the contract to an end at the end of the notice period; and

ii.                To agree a different termination date of the contract if both the Council and BBLP are in agreement.

c)     Cabinet agrees that this decision will be published as an open decision and made public by the Corporate Director of Economy & Environment within 14 days of the notice being sent to BBLP.