Agenda item

DECISION

That Cabinet recommends to Council:-

(1)       To agree to enter into a Strategic Alliance for the purposes set out in Section [1.12] of this report, effective from 1^st July 2020, for the purposes and under the terms described in this report and set out more particularly in the draft Memorandum of Agreement attached to it.

(2)   That the Strategic Alliance will be supported by a single merged workforce. This will be overseen and implemented by the Joint Chief Executive/Head of Paid Service.

(3)       That the savings of £15.4m (BBC £5.1M, ELDC £10.3M) identified in the Financial Business Case are built into the Medium Term Financial Plan.

(4)       That Robert Barlow becomes Joint Chief Executive/Head of Paid Service of East Lindsey District Council and Boston Borough Council.  East Lindsey District Council shall formally employ Mr Barlow, who shall, for the purpose of facilitating the Strategic Alliance, be seconded to Boston Borough Council as Chief Executive and Head of Paid Service under Section 113 of the Local Government Act 1972, effective from 1^st July 2020.

            Thereafter, East Lindsey District Council will contribute 67 per cent of the cost of Mr Barlow’s remuneration and Boston Borough Council will contribute 33 per cent of the same. Consultation should commence immediately.

(5)       That Michelle Sacks becomes Joint Monitoring Officer of East Lindsey District Council and Boston Borough Council.  Boston Borough Council shall formally employ Ms Sacks, who shall, for the purpose of facilitating the Strategic Alliance, be seconded to East Lindsey District Council as Monitoring Officer under Section 113 of the Local Government Act 1972, effective from 1^st July 2020.

            Thereafter, East Lindsey District Council will contribute 67 per cent of the cost of Ms Sack’s remuneration and Boston Borough Council will contribute 33 per cent of the same. Consultation should commence immediately.

(6)       That Paul Julian becomes Joint S151 Officer of East Lindsey District Council and Boston Borough Council.  Boston Borough Council shall formally employ Mr Julian, who shall, for the purpose of facilitating the Strategic Alliance, be seconded to East Lindsey District Council as S151 Officer under Section 113 of the Local Government Act 1972, effective from 1^st July 2020.

            Thereafter, East Lindsey District Council will contribute 67 per cent of the cost of Mr Julian’s remuneration and Boston Borough Council will contribute 33 per cent of the same. Consultation should commence immediately.

(7)       That the exit costs are charged to the reorganisation budget shown in the financial business case. The costs of the departing Statutory Officers shall be met by both authorities.  East Lindsey District Council will contribute 67 per cent of the cost. Boston Borough Council will contribute 33 per cent.  These exit costs will be recovered quickly from savings achieved through the operation of the Strategic Alliance and as modelled in the Financial Business Plan. Consultation with both Officers should commence immediately to start redundancy proceedings.

Portfolio Holder and Officer

Cllr Skinner

REASON FOR DECISION

Councillor Nigel Welton presented a report on a proposal for the creation of a strategic alliance between Boston Borough Council and East Lindsey District Council, outlining the potential benefits that would accrue from the alliance, including the sharing of statutory officers of Chief Executive, Monitoring Officer and Section 151 Officer.

The report stated that the proposal would involve each Council retaining its distinct and special identity, decision making powers and accountability.  The Joint Chief Executive’s task would be to combine the talent and experience of each authority’s officers to build capacity and deploy resources that were necessary to transform service quality across the board.

The goal was to deliver better outcomes for local people at a significantly lower cost than that which could be achieved if the authorities were to continue to operate separately.  Joint working on the planning and delivery of services would also mitigate pressure on the Council’s budgets and command greater influence in the allocation of resources from Central Government, the Lincolnshire Enterprise Partnership and others.

Joint working would also give the Councils a stronger voice in any process to reshape local government in Lincolnshire, promoting a common agenda with a single voice. They would also have gained experience of managing strategic change quickly and effectively.  There could also be a longer term possibility for the strategic alliance to grow in numbers, giving rise to promote a significant part of Lincolnshire, should the future bring consideration of alternative structures.

It was noted in the report that there was no settled blueprint for change.  The final shape of joint working and the pace of service transformation would be subject to agreement by both councils.  The first step would be the establishment of a Joint Statutory Officer team to advise and assist both authorities on how to ‘kick start’ change and merge workforces.

The report set out the purpose of forming a strategic alliance, shared characteristics, opportunities and challenges; a relatively small officer corps and limited revenue and capital resource to tackle the multitude of challenges each face; economic base, towns fund investment, tourism, rich built heritage, investment in transport and other key infrastructure which was a significant risk to the achievement of each council’s ambitions, finance and resources.

The financial pressures facing local government were outlined, the significant cuts in Central Government Grants which were unlikely to be reversed in the foreseeable future and limited opportunities to offset pressures, combined with increased demands for key services.

The financial pressure facing both Councils was likely to become more acute in the short term as a result of the loss of revenue and additional unplanned expenditure caused by the need to tackle the Covid-19 pandemic.

One of the consequences of the financial structure imposed on Councils was the pressure Government was placing on local authorities to scale up by adopting county wide unitary and mayoral structures.  Past experience in Lincolnshire suggested this would be difficult to achieve, and a better approach would be to build alliances from the ‘bottom up’. This would allow resources to be shared quickly and effectively, reducing pressure on budgets, and giving those partners a stronger voice in the allocation of scarce resources from central government and the shaping of new unitary structures.

The immediate potential for joint working between the Councils was identified in the report as:-

·         Seamless, uninterrupted planning and delivery of services to a community whose common needs were not primarily shaped or dictated by administrative boundaries.

·         Economies of scale with the potential to dramatically free up financial resources and deliver significant reductions in the management overhead, freeing more resources to be directed to frontline staff delivering customer service.

·         Sharing of existing best practice to improve both councils’ services.

·         Sharing of existing innovative ways of working which would provide an opportunity for career development and advancement for staff.

·         Opportunities for better coordinated and more effective joint working with other sectors.

·         The potential to develop and promote joint business cases for major investment that would assist both councils, such as the delivery of improvements to the A16 and coastal flood defence.

·         Greater potential to procure and take advantage of new technology more economically and efficiently.

The key to realising the opportunities quickly was an effective political leadership across both authorities served by a unified officer corps, led and made fit for purpose by a Joint Chief Executive.  This was a proven concept that had worked well, and could be implemented with pace and minimum risk where there was a joint political will to do so.

The first step in the process would be to appoint a Joint Chief Executive, and it was proposed this would be Mr. Robert Barlow, the Chief Executive of East Lindsey DC, effective from 1 July 2020.  Mr. Barlow would continue to be employed by East Lindsey DC and seconded to Boston BC under Section 113 of the Local Government Act 1972.  Simultaneously, Mr. Phil Drury would leave his post as Chief Executive of Boston BC.

In order to effect the rapid and effective implementation of joint working the Joint Chief Executive would have the power to appoint to all Management posts (management review) following the agreement of a new management structure supported by both Leaders.  It was anticipated this would be a three month process with an aspiration of minimising disruption to the employers and employees.  The appointments would be made from the existing pool of officers of both authorities.  Any associated costs of redundancy or retirement would be met in the proportions 67 percent paid by East Lindsey DC and 33 per cent by Boston BC.  Any such costs would be repaid in the same proportions to each authority within the first eight months of the alliance.

In order to ensure there was effective and coordinated governance of both Councils from the start, it was further proposed that a Joint Monitoring Officer and Joint Section 151 Officer should be appointed and it was recommended that Michelle Sacks and Paul Julian, both currently employed in those roles for Boston BC, be appointed to those roles.  The current Monitoring Officer and Section 151 Officer for East Lindsey DC had agreed to stand down from those roles.

The Joint Chief Executive, supported by the Monitoring Officer and Section 151 Officer, would then carry out further restructuring over a longer period, in consultation with and subject to the approval of each authority, within a new performance framework and on a service by service basis.  The period of review was expected to cover twenty four months, indicating a slow integration for the majority of employees.

The financial implications of exit costs were significant, but would be quickly recovered through the long term savings arising from the change.  Provision would be made for total costs of circa £750K split 67 per cent East Lindsey DC and 33 per cent Boston BC.  It was not expected there would be many other significant costs as a result of redundancy or retirement of other Management posts.  However, prudent provision had been made against year one savings.

A judicious target to reduce the combined budget of the two councils was considered to be £1.2m over the first 12 months.  The Joint Chief Executive would be charged with delivering the saving without a reduction in performance or service quality.  If was further suggested that a provisional target to deliver savings across the partnership from all budgets should be set in the sum of £600k, to be achieved from month 13 to 24 of the strategic alliance.

The savings achieved from the first phase of restructuring would be secured as far as possible by savings from long term vacancies, churn and the reduction of the management overhead.  Any adjustment to baseline costs or savings would be shared according to population numbers and ratio (33% BBC, 67% ELDC).

The strategic alliance would not affect the continuing political autonomy and decision making of the separate councils.  A formal review of the alliance and combined workforce would be carried out by a Joint Scrutiny Committee in January 2021 and January 2022.

Quarterly joint Cabinet/Executive Meetings would be timetabled for developing partnership structures, processes and priorities, and oversight of the success and delivery of financial and performance targets.   Subject to a positive review of the partnership, and adopting the logic that had driven the proposal, consideration could be given to introducing a further partner in the future.

The strategic alliance was built on a prudent business case, similar to those achieved by other comparable partnerships.  A financial savings model was attached to the report at Appendix B which identified potential savings of £15.4M over a 10 year period, in the proportions of East Lindsey DC 66 per cent £10.3M and Boston Borough Council 33 percent, £5.1M.  In order to allow both Council’s Section 151 Officers to remain independent from the report, Broadland and South Norfolk Councils had supported in the provision of independent financial advice, which was appended to the report.

In view of the potential conflict of interest of the Council’s statutory officers, Eversheds-Sutherland (International) LLP, Solicitors with substantial experience of Local Government and Employment Law, had been engaged to review the report and Memorandum of Agreement and confirmed that the approach indicated was lawful.  The advice received was set out in full at Appendix C of the report and incorporated into the Memorandum of Agreement which was attached at Appendix A.

The approach contemplated to take the alliance forward relied on a process known as mixed scanning.  The Joint Chief Executive and his Chief Officer team would work closely with Councillors of both authorities to identify the outcomes that were required to be delivered at the end of the process and the procedures that would have to be put in place to achieve those outcomes.  

Those matters having been established, and jointly agreed, the establishment would be created in stages, with it being explicitly understood that the process would throw up problems and challenges, which Management and Councillors would identify and solve to arrive at new working arrangements swiftly and pragmatically.

In response to questions submitted by non-Cabinet Members, the Leader confirmed that:

A meeting of the Corporate and Community Committee had been convened for Thursday 4 June to consider the report and forward recommendations and comments to full Council.

The two Council’s would be separate entities with their own funding streams, the alliance would be a combined management team.

The report had been compiled in a professional manner and independent advice had been sought on the business plan and legal position for the benefit of both organisations.

The proposal was financially sound and would provide much needed capacity across both Councils’ as highlighted in the Peer Review report from 2019.  The electorate had been in contact and commented it would be a positive step.  The only negative feedback received had been via social media.

The Cabinet members welcomed the report commenting that the proposal for a shared alliance was a positive way forward for both Council’s and for the residents of both areas. A shared workforce would provide improved services for the public at a reduced cost, protect front line services for the most vulnerable, and officers would have the opportunity to learn from each other’s strengths and expertise in a combined management team.

OTHER OPTIONS OR ALTERNATIVES CONSIDERED

None.

RECORD OF ANY CONFLICT OF INTEREST

None.

RECORD OF ANY DISPENSATION GRANTED

None.