Chris Lee provided a brief update as an introduction to the Phase C procurement programme.  The council is now 15 months into the process and it is anticipated it will return to scrutiny in June 2016, (after the evaluation of final tenders and before the preferred bidder recommendation goes to Cabinet for decision in July). 

The next stage is to invite final tenders.  It was highlighted the key driver of this initiative is financial need; it is no longer financially viable for the council to provide these services by itself and make the required savings.  The council is looking to achieve a collaborative arrangement in partnership with three other boroughs to achieve economies of scale.  The partners have worked with the market to co-produce solutions. 

Terry Downes, a GMB shop steward, was invited to address the meeting and made the following remarks:

·         Consideration of this approach started in November 2013, earlier than stated;

·         There is concern about the start date of this initiative as it applies to park and grounds maintenance.  It is believed that this will be earlier than previously acknowledge (in February 2017), to accommodate horticultural needs.  However, this won’t allow sufficient time to fulfil requirements to staff transferring under TUPE;

·         Questioned whether all the costs of transferring to another provider have been considered.  (Is the value of the council’s parks and ground maintenance capital assets, estimated at £250,000, included in the current bidding information?);

·         Highlighted that there is still no contract specification;

·         Reported that engagement with staff through DCC is not enough and that Friends groups are upset and frustrated; and

·         Questioned why an in-house solution is not being considered and why the final tender process evaluation methodology detailed in the paper does not include a comparison with the in-house provision and what the in-house team can provide in terms of cost savings.

Terry Downes thanked the Panel for being given the time to make these points.

Members invited Chris Lee to respond to the points raised:

·         Fully understands this is an anxious time for staff.  Their questions are legitimate and will be answered in the fullness of time.  However, currently there is no preferred bidder, final tenders are only just being invited and therefore the transfer of staff is over a year away, only at which point can staff’s questions be answered;

·         Consideration of this approach has been on-going for a long time; it is the duty of the council to continually look for innovative and more efficient ways to deliver services;

·         An earlier start date for the parks and ground maintenance element is being considered because of the demands of the horticultural year.  However, the council is very aware of its responsibilities and obligations to trade unions and staff and will fully comply with these.  Pensions will need to be considered when the preferred supplier is appointed.  It is hoped the contractor will be a Local Government Pension Scheme admitted body;

·         The tenders will be compared to the costs of the current in-house provision. Only those that can provide a cost saving below what might be achieved in-house will be considered.  The value of plant machinery is known and part of the budget comparison.

In response to questions from members, Chris Lee gave the following clarification:

·         An in-house solution has been ruled out; following research it is understood this won’t give the economies of scale and cost savings needed and since it would be one borough acting along, it would also put off external bidders.  There is confidence that external bids will exceed any cost saving that can be made internally.  There has also been a need to be clear that an external provider will be selected to ensure potential bidders believe this is a real opportunity;

·         The specific costs for Merton won’t be known until the final bids are provided as this will be based on the final specification, specific asset values and staff that will be transferred; and

·         Answers to staff concerns and questions will continue to be provided through DCC meetings to provide clarity as soon as it is possible.

Councillor Judy Saunders asked to address the Panel, Terry Downes and the other members of public attending.  She provided her endorsement of the Director and her support for the Phase C proposal.  However, she remains concerned about staff welfare and highlighted she is available to hear any concerns and be part of the dialogue.

RESOLVED: to note the report and for Phase C to return to the Panel for pre-decision scrutiny in June 2016