To inform Cabinet of the outcome of the competitive procurement process carried out in accordance with the Cabinet report approved on 28 November 2024 and the updated Public Realm Services model as set out in Appendix 1; and seek Cabinet approval to award the contract for the provision of the Public Realm Services to the successful bidder.

The Cabinet report marks the conclusion of a process to find and appoint a new contractor for the council’s largest single contract. Council officers were thanked for managing the procurement process, which has been completed on time and under budget. Special acknowledgment is also given to a former councillor John Harrington who initiated the review of the previous contractor, Balfour Beatty, which set the direction for the current changes.

This decision seeks to avoid repeating past approaches, to providing Public Realm Services.  The has council explored five different contractual models and selected a hybrid option. This new model will transfer several key services—such as asset management, network management, locality stewards, highways inspections, design and project management, customer services, communications, fleet management, and health and safety directly into the council.

As a result, 60 roles will move in-house, giving the council greater control and the ability to align activities with its own priorities and strategies. This approach provides the best outcome for Herefordshire.   The successful bidder will be announced in the new year.

The Cabinet discussed questions about:

The environmental standards required of the new contractor.

·       It was explained that government-mandated standards apply to works contracts. The procurement process included specific environmental questions, such as whether the bidder holds a valid ISO 14001 certification (an internationally recognised standard for environmental management systems (EMS)), or an equivalent from a mutually recognised UK organisation. The Cabinet had also looked for additional requirements such as access to competent environmental advice, their legal obligations to report carbon emissions under the Streamlined Energy and Carbon Reporting regulations, and industry recognised sustainability standards.

·       Bidders were also required to submit a draft carbon reduction and management action plan, outlining how they would deliver carbon reduction initiatives by 2030, in line with the council’s commitments.

How the public will see a difference in the new arrangements

• Under the new public realm contract, locality stewards who previously worked for Balfour Beatty will now work directly for the council. Their role will be to inspect roads and identify necessary jobs for the new contractor.  Potholes remain a high priority for the council, as well as our communities, this arrangement means the council can ensure that work is completed within agreed timescales and in accordance with the council’s highways maintenance plan.   Identified works will be reviewed by council staff before being ordered, to make sure the right work is requested and to avoid inefficiencies, such as repeatedly chasing defects along the same road.
• The new contract introduces a clear specification for repairs, for example how pothole repairs should be carried out. Payment will be made on a ‘per-pothole’ basis to illuminate increased costs for the council. The final repair work will be inspected by council staff, specifically highways inspectors, to ensure quality.

What opportunities will there be for the apprenticeships for young people

The council has built a strong social value and skills commitment into the new public realm contract. Specifically, the contract requires:

·       Six contracts per year to be awarded to local small and medium-sized enterprises (SMEs) to help deliver the contract.

·       450 apprentice weeks per year for local people.

·       Practical work experience and volunteering opportunities for up to eight young people in Herefordshire (aged 14–24), including those from underrepresented groups.

·       A commitment to support up to five recognized care leavers per year in accessing full-time, sustainable employment in Herefordshire.

·       Creation of up to five new full-time, sustainable local jobs in heritage and leadership roles.

·       An annual social value commitment to support supply chain development for up to four SMEs per year through dedicated supply chain training, ensuring the supply chain maximizes social value opportunities each contract year.

These measures are designed to boost local employment, skills, and social value as part of the contract’s delivery.

A litmus test for how well the Public Realm contractors are performing is the feedback we receive from Parish Councils – how will community commissioning improve outcomes

• The new public realm contract will allow parish councils to commission extra services directly from the council if they wish. Previously, the process was slow and costly, parish councils would request a service, receive a high quote, sometimes wait up to two years for delivery, and often regret the decision due to delays and costs.
• Now, with the service brought back in-house and a new contract in place, the contractor will be paid at pre-agreed rates for each item of work. A schedule of these rates will be made available to parish councils, making it easier for them to understand the costs and financial commitments involved when ordering extra services.

Group Leaders were invited to offer their views:

The Liberal Democrat Group outlined their views and noted that:

·       Given this decision to award the council’s largest contract, potentially involving up to £200m of public funds it’s one of the most significant decisions the administration will make. Although the Cabinet is legally entitled to make this decision, it should have been referred to the full council to allow all members the opportunity to fully examine or comment on the proposals.

·       Advocacy for stronger requirements for annual reviews and the establishment of a resident focus group to provide direct feedback on contract performance is something that was missing.

The Green Group outlined their views and noted that:

• The new approach will be more responsive, provide greater control, and deliver better value for money, however
• Questions remain regarding policies like “verging on wild” and ensuring that requirements such as ISO 14001 certification are included in the contract
• Existing Herefordshire Council policies are fully captured and implemented within the new maintenance contract.
• The new contract will allow members to see detailed programmes of works in a level of transparency and detail that can enable accountable challenge and scrutiny.

The Independents for Herefordshire outlined their views and noted that:

• General support for the approach taken, noting that the decision to award the contract is appropriately being made by officers, not politicians, following a thorough evaluation process supported by external lawyers.
• Concerns remain, such as how locality stewards will fit into the new scheme, the effectiveness of enforcement (especially regarding riparian rights), and the need for improvements in the transfer process of services.
• The importance of learning from past experiences and ensuring that future transfers work more effectively.
• Overall, they commend the council’s approach and look forward to positive changes, particularly in parish council meetings where the impact of the new arrangements will be most visible.

In responding to the comments raised, the Cabinet Member noted that:

• The process has followed constitutional and democratic procedures, with proposals reviewed by Connected Communities Scrutiny Committee before Cabinet approval.
• The cabinet remain open to collaboration and invites councillors from all parties to share their views and concerns, especially regarding policies like “verging on wild,” which will be implemented as part of the new contract.
• Performance reviews will occur regularly, with contractual remedies available if standards are not met.
• Enforcement responsibilities are coming in-house, and the council will work to strengthen these processes.
• New multi-year settlement for highways funding, which will improve planning and visibility of works, will strengthen transparency, collaboration, and a commitment to continuous improvement in service delivery.

The Leader of the Council concluded the discussions by inviting a proposer and seconder for the decision before them which is that:

a)    Cabinet approves the award of a contract (the Contract) for the provision of the new Public Realm Services to the successful bidder in accordance with the Cabinet report approved on 28 November 2024 and the updated Public Realm Services model as set out in Appendix 1 for an initial period of 6 years and 10 months (so as to align with Council financial years) and with the option for the Council to extend for a further 3-year period subject to and in accordance with the performance review mechanism set out in the contract.    

b)    Cabinet delegates authority to the Corporate Director Economy and Environment to:

i.               Finalise the contract and any ancillary contract documents;

ii.              In consultation with Property Services, agree and enter into the necessary leases to the successful bidder to enable the provision of the Public Realm Services;

iii.            On receipt of payment from the successful bidder, transfer the Council’s existing equipment (plant and fleet but excluding the winter         maintenance fleet) to the successful bidder so as to enable the provision of the Public Realm Services;

iv.            Accept the transfer of identified roles (circa 60) pursuant to the Transfer of Undertakings Protection of Employment Rights (TUPE) from the incumbent; and

c)    Cabinet delegates authority to the Corporate Director Economy and Environment to make all operational decisions necessary to implement recommendations a) and b).

The Cabinet Member for Local Engagement and Community Resilience proposed the vote, the Cabinet Member for Environment seconded.   

The recommendations were unanimously approved.