Agenda item

 

(Report by the Assistant Director – Support Services and Partnerships)

 

Appendix A is exempt from publication under paragraphs 3 and 4 of Part 1 of Schedule 12A of the Local Government Act 1972.

 

Portfolio Holder: Councillor Jonathan Noble

Prior to the introduction of the report by the Portfolio Holder, the Mayor invited Mr. Lewis Ducket, Chief Executive of Public Sector Partnership Services Limited (PSPS Ltd) to address the Council.

 

Mr. Ducket outlined the benefits of the Council joining PSPS Ltd including achieving cost savings, investment in IT systems, creating capacity and resilience to improve services, and development opportunities for transferring staff.  The Council would not be losing control over services as it would effectively co-own the company and have representation on the Board.

 

Councillor Jonathan Noble, Portfolio Holder for Finance and Commerce, introduced the report setting out the proposal for the Council to become a third shareholder in PSPS Ltd with East Lindsey District Council (ELDC) and South Holland District Council (SHDC), to deliver the back office services for the Council, including Finance, Human Resources, Health and Safety, Customer Services, Revenues and Benefits, Information Technology and Digital Services.

 

The report stated that PSPS Ltd was as a Local Authority Trading Company (LATCo) and was overseen by a Board of Directors appointed by each shareholder organisation. It operated at ‘arms length’ with activities and strategic direction influenced by a group of stakeholders drawn from the Councils involved. 

 

The delivery model was principally a collaborative partnership with services delivered through a commissioning type arrangement and underpinned by agreed standards of service which were reviewed on an annual basis to enable each Council to deliver their strategic plans and priorities.

 

Having recently completed its first ten year contract and delivered annual savings of £2.1m, PSPS Ltd had secured a further ten year contract to deliver its services to ELDC and SHDC with a commitment to an agreed new programme of transformation and efficiency savings that would generate cumulative savings over the twenty year contract period of £25.8m for the current shareholder councils.

 

As part of the new ten year contract extension to 2030, the Board of Directors and existing shareholder Councils had agreed to explore growth opportunities with Councils across Lincolnshire.  In October 2020, PSPS had approached Boston Borough Council to explore such an opportunity for the Council to join neighbouring Councils as a third shareholder of PSPS.

 

Since the initial approach to the Council, PSPS had completed outline business case principles which had subsequently been reviewed by stakeholder representatives at both ELDC and SHDC and approved by the PSPS Board of Directors in December 2020.  In January 2021 both ELDC and SHDC as existing shareholders took formal decisions to invite Boston BC to become a third shareholder and both Councils had approved an invitation offer to Boston BC. Shareholding equity between the Councils would stand at 48% ELDC; 28% SHDC and 24% Boston BC and Boston BC would have two Director positions on the Board of shareholders.

 

Subject to approval by Full Council, all Councils would work towards the transition of services from 1 April 2021 in order to meet the agreement of the existing shareholders and to allow the arrangement to commence at the start of the financial year, which was important for operational considerations.

 

The performance of PSPS would be reported through the Council’s performance and management framework and scrutiny work plans.  An annual Member Briefing would also be delivered.

 

The Business Case was appended to the report and detailed the principles concerning the management of people, the operational management and the financial implications.  PSPS supported and developed its employees through its Workforce Development Plan (attached at Appendix B of the report) which was inclusive and focused around attracting and retaining talent, raising skills and standards, supporting health and wellbeing, rewarding and recognising its staff and working together for the future.

 

The Business Case set out the benefits for the Council joining PSPS as a shareholder, including:

 

• A financial saving of circa £627k over five years, increasing to £1.8m over ten years which would reduce the financial risks the Council currently faced within the medium term financial plan and potential for further risks associated with the financial outcomes of the pandemic.

 

• Investment in IT and digital infrastructure over two years at a cost of £634k as opposed to £825k if the Council were to complete the work ‘in house’, which represented a capital saving of £191k enabling the Council to invest in other projects prioritised within the Capital Programme.

 

• Sharing of future infrastructure development costs resulting in further savings over the longer term.

 

• One off cost of £6k to join as a shareholder for necessary legal representation to review and update the PSPS Joint Venture Shareholder’s Agreement (JVSA) and Articles of Association to amend shareholder provisions and draft and finalise other associated documents.

 

• Greater level of resilience in the provision of back office services to cover vacancies as and when they arose and have a stronger pull within the market place when recruiting.

 

• The transfer of services would create a level of capacity for staff not transferring to support the delivery of services and projects which had a notional value of £285k over five years and £570k over ten years.

 

• Working across a consortium of neighbouring authorities PSPS would be in a better position to safeguard the jobs of the Council’s staff transferring into the company in the long term and could also offer a wider range of opportunities for career progression than the Council.

 

• The proposal was in line with the Council’s 4^th priority within its 2020 – 2024 Corporate Strategy in ‘delivering high quality services and maximising use of technology and data to reduce costs and improve performance and efficiency.’

 

• The ability to collaborate through a strategic partnership in advance of further debates that were anticipated in relation to local government re-organisation.

 

Consultation had commenced with affected employees via service specific briefing sessions held in December 2020 hosted by the Chief Executive.  Further informal staff engagement was on-going through respective staff forums and Service Managers for the areas subject to potential transfer had been offered one to one sessions with PSPS.  If the proposal was approved by Council a formal staff consultation process would commence.

 

The proposal had also been the topic for two Member Briefings in advance of consideration by the Corporate and Community Committee and Cabinet who had referred the recommendations to Council for approval.

 

During debate the following comments were made:

 

• It was important that Boston did not lose its identity and become a puppet of neighbouring councils by joining PSPS.
• The report provided no alternative options to consider, going out to the ‘market place’ should be considered before committing to PSPS.
• The arrangement would be inequitable as Boston would be a minority on the Board with no voting rights.
• The financial health of the organisation was concerning.
• The powers of Members would be diminished as decision making would be taken away from the Council and delegated to the Chief Executive.
• Clarification if the administration group Members had been ‘whipped’ in respect of the decision.
• Staff had to be the main priority and transferring did not reflect well with the public.
• TUPE was not worth the paper it was written on and the Council had a duty to protect its staff.
• The need to invest so heavily in IT was a result of the administration running it into the ground and a dereliction of duty.  Reserves should be used for this purpose rather than joining PSPS.
• Year on year savings were required to be made whilst maintaining service delivery and business continuity and joining PSPS would provide this.
• The Council needed to invest heavily in IT infrastructure in the estimated amount of £825k if undertaken in house.  Working with PSPS would achieve a saving of £191k.
• The proposal put forward had been carefully put together and scrutinised to deliver improved services and protect employees.
• This would be the first step in a larger strategic alliance and an opportunity to work with other councils before local government re-organisation was brought forward.
• This would be an opportunity for development of services, staff and provide resilience in service areas where needed.
• The PSPS contract with ELDC and SHDC had been in place for 10 years and proved successful.

 

In summing up, Councillor Jonathan Noble stated that valid points had been made and responded to the comments raised during debate including:

 

• Staff consultation had commenced in December 2020;
• Necessary investment in IT and long term savings;
• PSPS delivery record to founder councils;
• The need to create greater resilience within service areas;
• Annual negotiation of service level agreements;
• Adherence to the Lincolnshire County Council pension scheme for transferring staff;
• Minimal joining cost to the Council of £6k;
• Integrity of the council would remain intact.
• Conservative Members had a free vote on the proposal.

 

A procedural motion was moved by Councillor Anne Dorrian and seconded by Councillor Aaron Spencer that the vote be taken by means of a recorded vote.

 

On being put to the vote the procedural motion was carried. 

 

It was moved by Councillor Jonathan Noble, seconded by Councillor George Cornah and

 

RESOLVED That the proposal for Boston Borough Council to become a shareholder in Public Sector Partnership Services Limited and transfer its Financial Services, Human Resources, Customer Services, Revenues & Benefits, Information Technology & Digital services and Health & Safety teams into the company be approved. That delegated authority be granted to the Chief Executive, in consultation with the Leader of the Council, the agreement of, and signing of, the contract and associated documents to join Public Sector Partnership Services Limited including those linked to the pension fund That delegated authority be granted to the Chief Executive and S151 Officer, in consultation with the relevant Portfolio Holder, to approve or reject individual business cases for each element of the Transformation Plan.

 

For                                          Against                                              Abstain

 

Abbott                                     Bedford                                              Howard

Ashton                                   Bell

A Austin                                 Cooper

R Austin                                Dorrian

Cornah                                  Goodale

Dani                                       Hastie

Evans                                     Rush

Griggs                                    Spencer

Noble                                     Watson

Pickett                                    Woodliffe

J Skinner

P Skinner

Stevens

Trafford

Welbourn

Welton

 

It was moved by Councillor Jonathan Noble and seconded by Councillor George Cornah that:

 

That the appointment of the Portfolio Holder – Finance & Commercial and one Member from any of the Opposition Groups to the 2 Director posts on PSPS be approved and those appointments to be effective until May 2023.  

 

An amendment was moved by Councillor Anne Dorrian and seconded by Councillor Michael Cooper:

 

To approve the Portfolio Holder – Finance and Commercial and one member from the Opposition, who will be chosen by the Opposition Groups, to be appointed to the 2 Director posts on PSPS and that appointment to be effective until May 2023. Thereafter, both the ruling group and the opposition will continue to select their own candidate for the two Director posts.

 

The Monitoring Officer confirmed that if the amendment was carried the Opposition Group nomination would be required to be approved at a future meeting of the Council.

 

On being put to the vote the amendment was lost.

 

On returning to the substantive motion, Councillor Alison Austin nominated Councillor Alan Bell to be appointed to the opposition Member Director post.  This was seconded by Councillor Judith Welbourn.

 

The substantive motion was then put to the vote and it was

 

RESOLVED that the appointment of the Portfolio Holder – Finance & Commercial and Councillor Alan Bell as an Opposition Group Member to the 2 Director posts on PSPS be approved and those appointments to be effective until May 2023, whilst they remain Members of the Council, or until the appointment of their successors.