Response to questions from UNITE raised at Scrutiny for Policies and People Committee on 21 November 2014

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Q1 Support Services for Education (SSE)

 

We support the main recommendation for Cabinet to Retain Support Services for Education within the democratic and accountable control of this Council as the Best Value option.

 

The recommendation supports the Trade Union response to this project that we support a plan to improve the efficiency and innovation within the in-house service. Will the Leader and Cabinet support the proposed Service Improvement and Innovation Plan with funding on an Invest to Save basis, where, for example, IT and process improvements are identified?

As stated this question was raised at County Council and I believe you have already had a response.

 

The Trade Unions I believe will welcome a model that directly involves Schools, SCC, Students and parents, Professional Associations and the formal recognition in the recommendations that this is the Best Value option for the service users, Somerset Taxpayers and the dedicated staff involved.

 

We believe that a fully supported Service Improvement and Innovation Plan will lead to this service continuing to demonstrate Best Value now and into the future.

 

Q2 Finance Case (section 3 pages 21 – 25):

 

  1. a)         If an external model (e.g. Joint Venture Company-JVC) can be viable does this include assumptions about “growing the business” and winning third party business at the expense of equivalent Support Services for Education services from other Local Authority areas?

Yes this does include prudent assumptions on growth in terms of the development of new service packages, providing services to new customers eg Early Years providers, independent schools, and potentially schools/others outside of Somerset.  Somerset already trades to a limited degree across its borders and other providers trade in Somerset – the nature of the market is that this type of trading will continue.

 

  1. b)         What is the track record of Joint Venture Companies (similar to the Staffordshire JVC) winning new business as is often claimed?

In light of the recommendations to Cabinet ie that the in-house service should be retained I have not undertaken detailed analysis.  The assumptions on growth are though based on input from our external commercial advisor who does have some knowledge of other models including Joint Ventures.  His view is that the assumptions made are prudent.

 

  1. c)         What methodology will be used to learn lessons from the Entrust/Capita/ Staffordshire Joint Venture Company (JVC) which has been reported widely?

(‘Significant concerns’ over schools service Entrust http://www.bbc.co.uk/news/uk-england-stoke-staffordshire-27663363)

 

In light of the Cabinet recommendations this has not been pursued but I do have the contact details of the relevant officers in Staffordshire to pursue this if necessary.

 

Q3 Economic Case (section 4 pages 26 – 40):

 

  1. a)         “From the perspective of SCC and schools/early years providers the in-house service delivery model (moving towards full cost recovery) has the highest (most beneficial) ranking.” What steps and measures can be taken to ensure this continues?

 

There is a wide range of factors contributing to this assessment. There is in particular the need to ensure the delivery of high quality good value services which meet the changing needs of SSE’s customers – in particular schools but also SCC.  The Business Improvement Plan incorporates the need to improve customer services and marketing as well as a focus on business strategy and the development of a wider range of services.

 

  1. b)         “There is a wide range of risks/potential impacts that would need to be managed if it is decided to transfer SSE into an arms’ length organisation.” How do these risks compare with the In House model?

 

The in-house model will face a range of risks relating to its move to full trading.  These relate to the need to grow the business at a time when the market is increasingly competitive and complex, the need to make efficiency savings and yet still deliver high quality services.  There is also the pressure in terms of reductions in both the LA and school budgets as well as the need to increase prices to recover full costs.  These are the sorts of risks that most business units would face and the intention is to try and mitigate the impacts through the implementation of the Business Improvement Plan.  There is also the risk that there is a potential lack of the commercial skills needed to drive SSE forward and achieve what will be a fairly significant cultural change for staff.  The intention here is to appoint a Commercial and General Manager to take the lead on this aspect. 

 

An arms’ length organisation would face similar issues and in an independent model there would be the added risk of it being a new company.  For SCC there would be the need to secure legal advice to ensure the development of the appropriate contractual documentation to mitigate risks related to non- delivery of service (especially those where there is a statutory duty) and to manage requirements related to a range of corporate requirements that would need to be resolved to protect SCC’s position eg property, data protection, information sharing and others which are not an issue for the in-house model.

 

Q4 Commercial Case and Management Case: “The development of the in-house unit can be achieved within existing resources…..If it was decided to transfer SSE into an arms’ length organisation, there would be the need for additional one off financial and staff resources.”  Will focusing resources on an In House Service Improvement and Innovation plan provide the best value option and avoid significant contractual, legal and other procurement and outsourcing costs as well as weakening School and Council control?

 

The Business Case shows that the in-house option currently provides the best value for money from SCC’s perspective and it avoids the one off costs associated with moving SSE to an external model.  There will however be the need to develop internal Service Level Agreements between SCC and SSE to confirm the service requirements and standards as well as the process for escalation if there are performance issues.  The timeline for this has already been developed and will probably take until Spring 2015 to complete.  Once these are in place it will give SCC control over the delivery of service provided to it by SSE.

 

In terms of school control it is expected that the current engagement of the Schools Client Group and Compact will continue as the main way in which schools and early years providers can provide customer feedback/challenge poor performance/influence the way in which SSE develops as a trading unit.  It is also proposed that a Transitional SSE Management Board is established comprising SSE, SCC Commissioners and Compact representation.  This Board will hold SSE to account for delivery of the services and oversee its progression towards full cost recovery and commercialisation.

 

 

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