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Decision Maker: Cabinet Member: Corporate Decision maker: Cabinet member: corporate strategy & finance Decision date: 3 March 2016 Scrutiny committee 8 March 2016 call-in date: Date decision may 9 March 2016 be implemented: Title of report: To agree the approach to cooperation with Rutland in delivery of ICT services Report by: Head of corporate finance Classification Open Key Decision This is not a key decision Wards Affected Countywide Purpose To agree that Herefordshire Council accept the delegation by Rutland County Council of their enterprise system support function (an element of ICT support) and that Herefordshire Council should act as lead commissioning council for the service. Recommendations THAT: (a) Subject to satisfactory completion of due diligence, negotiations and any consultations as appropriate, the Cabinet Member accept the delegation by Rutland County Council of their enterprise system support function (an element of ICT support) under section 101 of the Local Government Act 1972 to Herefordshire Council, acting as lead commissioning council for the service (see Rutland County Council forward plan reference FP/111215/02). Further information on the subject of this report is available from Josie Rushgrove, Head of Corporate Finance on Tel (01432) 261867 And that: (i) once delegated to Herefordshire Council, Rutland’s enterprise system support service be provided by Hoople Limited. The agreement is expected to be for an initial 5 year period. Herefordshire Council is to put in place a contract with Hoople to deliver hosting and support services for Rutland County Council for a period of five years at an initial annual cost of £77k (estimated total value £385k). (ii) authority be delegated to Herefordshire Council’s Assistant Director Commissioning for agreement and implementation of the delegated service arrangements, including any service level agreements between Hoople and Rutland County Council and to accept the delegation of the enterprise system support function from Rutland County Council. (iii) the Assistant Director Commissioning of Herefordshire Council and the agreed representative of Rutland County Council will form an officer board for management of the service. Alternative options 1 The council could refuse to accept the delegation. However, this approach would mean that the council would not enjoy the benefits from the arrangements (detailed below). These benefits include savings as a result of shared overheads, sharing the cost and risk of system development, increased service resilience, supporting employment in Herefordshire, and supporting the future growth opportunities for Hoople. 2 Rutland Council and Herefordshire could put in place a joint committee to manage the service. However, this would add an unnecessary level of complexity and cost that is not justified by the scope of services involved. Reasons for recommendations 3 Cooperation between councils can bring a number of benefits to all participants. The proposed cooperation between Herefordshire Council and Rutland Council will deliver savings for both councils and a range of other benefits including: a. easier recruitment and retention of skilled staff b. improved investment and innovation opportunities – by pooling investment resource c. having the scale needed to access best-of-breed technologies, business processes and management techniques d. improvements in service quality – by using the above to transform the way services are delivered e. Providing service users with access to specialist staff and state of the art Further information on the subject of this report is available from Josie Rushgrove, Head of Corporate Finance on Tel (01432) 261867 information systems 4 The proposal is for Rutland to delegate the functions to Herefordshire Council and for the service to be delivered by Hoople. These arrangements will allow Hoople to deliver a consistent and efficient service to both organisations. Key considerations 5 The council’s corporate plan 2016-2020 includes the strategic priority to support the growth of our economy and the number of people in work and to secure better services, quality of life and value for money. To help support the corporate objectives in a period of funding reductions from central government the council needs to become more commercial in outlook, seeking to obtain maximum value from its assets and looking for innovative approaches to securing financial security into the future. 6 As part of its innovative approach Herefordshire Council, with its NHS partner, has established Hoople Ltd to deliver a range of back office services. Hoople is a unique company created in April 2011 to deliver quality business support services to clients across the public and private sector. Hoople is jointly owned by Herefordshire Council and Wye Valley NHS Trust. It has developed its client base both inside Herefordshire and beyond and offers a vehicle for both commercial growth and cooperation across public sector organisations. 7 This proposal is for Hoople to deliver Business World (known as Agresso) support to both Herefordshire Council and Rutland Council. Hoople has developed a strong expertise in the implementation and support of enterprise applications, such as HR and finance, using the Business World enterprise resource planning (ERP) system. Its support for Herefordshire Council and the Places Partnership over the last five years means that it has the capability to provide Rutland Council with an up to date and fit for purpose enterprise system to meet its needs. Because Rutland’s configuration will match that of Herefordshire Council, this can be done both quickly and efficiently. 8 The benefits for Rutland Council will be cost efficiencies together with access to a more modern system with effective support for its user community provided by an organisation with a proven track record. The benefits to Herefordshire Council will be lower costs from efficiencies driven by better use of assets and sharing overheads with Rutland Council. Hoople will benefit from improved relationship with the provider of Business World, increased credibility and market presence, and the opportunity to provide a wider set of services such as training. 9 The framework for public sector cooperation is described in the section on legal implications. In summary, the options are: a. one local authority can delegate its powers to another authority. This typically happens when a local authority is particularly well positioned to deliver a certain type of service, so it agrees to deliver that service on behalf of the other authority; b. alternatively, local authorities can agree to exercise their functions jointly. This typically happens where efficiencies can be achieved in delivering services such as back office functions. This is usually achieved by establishing a joint committee of members from all of the participating authorities to manage the functions in question. The participating authorities delegate the necessary Further information on the subject of this report is available from Josie Rushgrove, Head of Corporate Finance on Tel (01432) 261867 powers to the joint committee which decides how the function will be fulfilled on behalf of all the authorities. c. local authorities can also set up a number of different types organisations such as Teckal compliant companies, community interest companies, trusts. 10 Whilst joint committees offer a greater degree of responsibility and control to both councils, there is a significant additional administrative burden. In this case the delegation approach is recommended as it offers a simpler approach to managing the function. 11 This kind of cooperation between councils (and other public bodies) has demonstrated itself to be capable of bringing a number of benefits to the participants. Firstly, the proposed cooperation between Herefordshire Council and Rutland Council will deliver savings for both councils. The agreement is scheduled to last for five years with forecast annual savings for Herefordshire as shown below: Herefordshire Council annual Percentage Cost Saving estimates Savings Agresso Unit 4 / V1 system costs £135k £15k 11.0% Agresso system support £130k £5k 4.0% Total £265 £20k 8% 12 Other potential benefits of cooperation between local authorities identified by CIPFA1 are: a. easier recruitment and retention of skilled staff b. improved investment and innovation opportunities – by pooling investment resource across partners c. having the scale needed to access best-of-breed technologies, business processes and management techniques d. improvements in service quality – by using the above to transform the way services are delivered e. Providing service users with access to specialist staff and state of the art information systems 13 As it increases the number of users and organisations it supports, Hoople will be able to provide a more resilient service. The higher level and quality of resources available within Hoople will make it better able to cope with and manage issues affecting individual organisations. 14 By increasing the number of public sector organisations that it supports, Hoople will increase its influence with Unit4, the providers of Business World, ensuring that it has 1 CIPFA Sharing the gain, 2010 Further information on the subject of this report is available from Josie Rushgrove, Head of Corporate Finance on Tel (01432) 261867 access to a higher quality of support. 15 A high level draft timetable for the ‘on boarding’ and support of Rutland Council is shown below. The preparation and setup activities
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