northlincs.gov.uk

PRESENT:-   Councillors, Chase, Hannigan, Patrick, C Sherwood, Walker and Waltham.

Sally Jack, Helen Manderson, Mike Wedgewood, and Richard Mell also attended the meeting.

1.  DECLARATIONS OF DISCLOSABLE PECUNIARY INTERESTS AND PERSONAL OR PERSONAL AND PREJUDICIAL INTERESTS – There were no declarations of disclosable pecuniary interests, personal or personal and prejudicial  interests made at the meeting.

2.  TO NOTE THE APPOINTMENT OF COUNCILLOR BARONESS LIZ REDFERN AS CHAIRMAN OF THE JOINT COMMITTEE UNTIL 31 MAY 2017 – The secretary to the joint committee requested the joint committee to note that Baroness Councillor Liz Redfern had been appointed as chairman of the joint committee for the period until 31 May 2017.

Resolved – That the above appointment be noted.

3.  APPOINTMENT OF VICE CHAIRMAN – The secretary to the joint committee requested that the joint committee appoint a vice-chairman from the members of North East Lincolnshire Council in accordance with the joint committee’s terms of reference.

Resolved – That Councillor Patrick be and he is hereby appointed vice-chairman of the joint committee until 31 May 2017.

Councillor Patrick, in the absence of Baroness Councillor Mrs Redfern, thereupon took the Chair.

4.  DATES AND TIMES OF FUTURE MEETINGS – Resolved – That the proposed dates for the meetings of the joint committee in December 2015 and January 2016 be rescheduled in consultation with members of the joint committee.

5.  (1)  TRANSFORMATION AND SHARED SERVICES – The Shared Services Board submitted a report updating the joint committee on the positive progress being made to implement the shared back office services between North Lincolnshire and North East Lincolnshire Councils including the establishment of this committee.  The report also considered the detailed arrangements for the operation of the joint committee.

The shared back office services initiative between North and North East Lincolnshire Councils had grown out of the need to provide efficient and effective support services at minimum cost in order to protect frontline services to local people within Northern Lincolnshire.  Both organisations had priorities focussed on building a strong economy and supporting communities that were resourceful and resilient and able to do more for themselves.  The shared service model supported these ambitions by creating a flexible and ‘expert’ support function to frontline service delivery. This would free frontline resources to work more closely with businesses and communities to create the conditions to support the wider organisational aims which included –

• Increased investment and job creation.
• Improved skills and educational attainment.
• Support the development of safer and stronger communities.
• Improved local health and well-being.

  The new service model would be more efficient, would use resources more effectively and would be more adaptable to changes locally, regionally, and nationally.  Whilst the overall impact of the new model would be a leaner operation, the long term sustainability for services would be secured by the “expert” and flexible nature of the model.

  Both councils had a history of working together and a proven track record.  Shared services had already been established between the two councils for local taxation and benefits, procurement, print and insurance (with the latter also involving the East Riding of Yorkshire Council).   These all operated successfully.  In January/February 2015, a decision had been taken to extend the arrangements into a full back office service.  Arrangements had therefore been developed to implement shared services for Information Technology, Finance, Internal Audit, Human Resources and Legal Services.  These would also now include Member Development and Training and Graphic Design/Publications.  Following the decision to proceed each of the above services had produced business plans that set out in detail how each service would be structured, how it would deliver the joint service, what investment needs there were, how the target savings would be achieved, how stakeholders needs were met etc.  So far governance of the project had been via a board made up of officers from each council and workstream sub boards composed similarly for each of the five services as set out above.  Oversight of the development had been via the relevant cabinet member at each council.

  At its meeting held on 14 July 2015, North Lincolnshire Council’s cabinet had considered a detailed report on transformation of shared services.  A similar report had been considered by North East Lincolnshire Council’s cabinet on 12 August 2015.  Both councils had therefore agreed to establish a joint committee to govern the delivery of the shared services between the two authorities pursuant to Sections 101 and 102 of the Local Government Act 1972 (as amended) and Sections 19 and 20 of the Local Government Act 2000 (as amended).  A copy of the reports considered by each council was attached as an appendix to the report.

  It was therefore necessary for the joint committee to consider its membership, governance and constitutional arrangements and the way it would operate on a practical level into the future.  It was proposed that the joint committee should consist of three members from each of the two council’s cabinets, with the membership as detailed in paragraph 2.6 of the report.  Substitutes would be permitted in line with the rules of conduct of meetings and proceedings of the joint committee.  The first chairman of the joint committee had been appointed by North Lincolnshire Council and would hold office for the period up to 31 May 2017.  The chairman was Councillor Baroness Liz Redfern.  Thereafter, the chairmanship would rotate between North Lincolnshire Council and North East Lincolnshire Council on an annual cycle.  The joint committee would also appoint one of its members to be vice chairman.  The vice chairman would be a member nominated by North East Lincolnshire Council and would also hold office for the period up to 31 May 2017.  Again, in line with the chairmanship of the joint committee, this would rotate between the two councils on an annual cycle.

  The report then considered various other arrangements in relation to the operation of the joint committee including its terms of reference, the frequency of meetings, briefing meetings, the preparation of reports and report format, dealing with urgent business, standing orders/procedure rules, access to information, the treasurer to the joint committee and other relevant issues.

  The report also considered the resource implications involved which indicated that the shared back office services were planned to begin on 1 April 2016 and that the financial implications could be summarised as combined savings for both councils of £12.6m over a ten year period.  The savings result from a joint investment of £2.5m of which £1.9m had been provided by the Transformational Challenge Award (TCA).

  Attached as appendices to the report were the reports considered by both councils cabinets in July and August, the shared back office proposals service outlines and the terms of reference for the joint committee governing shared services between the two councils, including the rules for conduct of meetings and proceedings of the joint committee.

  Resolved – (a) That the joint committee notes the positive progress being made to implement the shared back office services between North Lincolnshire and North East Lincolnshire Councils with effect from 1 April 2016; (b) that the joint committee approve the proposals/methods of working as detailed in the report including the timetable of meetings and briefings for the future, and (c) that the chairman and vice chairman be authorised to determine any matters of urgent business that may arise and report such decisions to subsequent meetings of the joint committee.

  6.  (2)  TRANSFORMATION AND SHARED SERVICES – THE JOINT COMMITTEE ON SHARED SERVICES – FORWARD PLAN OF ACTIONS – Further to minute 5, the Shared Services Board submitted a report which considered the forward plan of actions for the joint committee on shared services.

  The detailed background and arrangements for the operation of the joint committee were set out in a separate report by the Shared Services Board, minute 5 above refers.  Attached as an appendix to the report was a proposed forward plan of actions which set out those decision which the joint committee was required to take to progress the work of the shared service initiative. The forward plan of actions covered the period of the initial three monthly joint committee meetings beginning with this meeting and subsequent monthly meetings together with the first quarterly meeting planned for April 2016.  A further forward plan covering actions beyond April 2016 would be submitted to the joint committee in due course.

  The forward plan of actions as set out as an appendix to the report had been considered by the Shared Services Programme Board and represented a robust, logical and realistic sequence of actions that would ensure the successful implementation of shared services whilst maintaining business as usual.  The forward plan had arisen from an analysis of progress against the shared service programme plan and assessments of the current position of each of the five workstreams as detailed in the report.  To approve the contents of the forward plan of actions would ensure the timely and orderly implementation of shared services.  It would enable sufficient challenge and scrutiny of each of the workstreams and the overall programme plan and give the joint committee confidence of the proposed efficiencies and improvements to services would be achieved.

  Reference was again made to the resource implications involved and in particular to the envisaged savings of £12.6m over a ten year period.  Equally in relation to property, the shared services would continue to occupy the office accommodation they used at present but with changed configurations.  Agile working principles would be employed wherever possible to ensure both councils were serviced efficiently.  Some joint teams would need to be located at one council and also work at the other council’s sites.  Overall a similar proportion of staff would be located within each council area as now, to preserve existing economic benefits.

  Resolved – That the joint committee approves the forward plan of actions for the first three monthly meetings and the first quarterly meeting as detailed in appendix A to the report.

  7.  (3)  FINANCIAL REPORT – The Shared Services Board submitted a report informing the joint committee of the background information relating to resources, savings, investment and risk information within the scope of the shared services programme.

  Both councils had approved the setting up of shared back office services in early 2015.  Minutes 5 and 6 above refer.  To support the implementation of the shared service, funding of £1.9m had been secured from the Department of Communities and Local Government (DCLG) through a successful Transformational Challenge Award (TCA).

  The report now submitted provided background to the shared services project for the newly formed joint committee which included –

• Budgetary information detailing the net budget position for each in scope service and savings assumed through the new arrangements over the next three financial years.
• Details of how the TCA funding would be utilised to support the implementation of the new arrangements.
• Strategic risks for each of the five new shared service areas.

  The shared back office services would begin on 1 April 2016.  The savings result from a joint investment of £1.9m provided via the TCA Award.  Original cost estimates including the bid amounted to £2.5m therefore requiring council contributions of £0.6m.  However, some further detailed had been undertaken into the costs of implementation which at present indicated that the £1.9m may provide sufficient initial investment.  The TCA budget would continue to be monitored and revised as works identified, external prices obtained and levels of staff exit costs were realised.  A breakdown of how the TCA funding was planned to be utilised, by workstream, was provided in appendix 2 to the report.  The largest area spend related to the Information Technology (£0.925m) workstream where investment would be made in the standardising, joining up and streamlining of existing ICT infrastructure for joint use as appropriate.  This would include but not limited to –

• Microsoft Enterprise Agreement
• Joint Network Connectivity
• Data Centre Consolidation
• A single IT Solution Centre
• A common e-mail/calendar system, platform and administrator/support

  Additionally, the Human Resources and Finance workstreams included capital spend on back office systems to support the integration between the two councils.

  The second largest area for spend (£0.51m) (from the TCA Award) had been allocated for staff exit costs although this was the maximum envisaged and both councils would work together to minimise the number of reductions through the use of HR strategies including redeployment.

  The TCA bid envisaged joint savings of approximately £1.2m per annum with cumulative savings of £12.6m over a ten year period.  Both councils were also seeking further savings as part of their financial planning from 2017 onwards.  Appendix 3 to the report provided a detailed outline of the 2015/16 base revenue budget for each service at each council.

  The five workstreams had a joint net revenue budget of £15m over the two councils, this net position was forecast to reduce by £1.8m from the shared service arrangements.  This would realise a cumulative net saving of £15m, comfortably exceeding the estimate in the original TCA bid.

  A full risk register was maintained by the programme manager and key strategic programme risks could be summarised as –

• Unforeseen/Underestimated Costs
• Non/Under Delivery of Savings
• Programme Outcomes do not meet the strategies of each council
• Opposition from staff, unions, customers, local press etc
• Loss of staff knowledge and expertise through reduced resources impacts of service delivery

  The report contained further detailed information about this matter and appendix 1 included details of the 2015/2016 base revenue budget for each of the services within the arrangement and appendix 4 provided details of workstream of total full time equivalents (fte) in scope of the shared service programme.

  Resolved – That the joint committee notes the background information in respect of resourcing, savings, investment and risks as set out in the report.

  8.  (4)  AUDIT, RISK, FRAUD AND INSURANCE SHARED SERVICE – The Shared Services Board submitted a report which considered the proposed structure for the Audit, Risk, Fraud and Insurance Shared Service between North Lincolnshire Council and North East Lincolnshire Council.

  Internal Audit was one of the five key components of the shared back office service initiative between North and North East Lincolnshire Councils and the report contained detailed information about how the service named the Audit, Risk, Fraud and Insurance shared service was to be structured.

  The current responsibilities for the Audit Teams at both councils were very similar and were detailed in paragraph 2.1 of the report.  Both functions were led by suitably qualified and experienced chief internal auditors who both reported to their respective Directors of Finance (section 151 officers) for professional matters.  The vision for the audit shared service was detailed in paragraph 2.6 and the draft proposed structure for the service was attached as an appendix to the report.  As laid out in the business plan the service would be led by a Head of Service responsible for the overall direction and delivery of the service, whose responsibilities would include carrying out the role of “Chief Audit Executive (CAE)” as laid out in the Public Sector Internal Audit Standards (PSIAS).  The service would encompass both Internal Audit, Risk and Governance, Insurance and Fraud and the proposed structure reflected how these would be managed in the future.

  The proposed structure set out in the appendix had been subject to consultation with staff and trade unions and considered by the Shared Services Programme Board.  It represented an efficient and workable structure to deliver these important services to both councils.  Savings targets would be met through implementation of this structure whilst maintaining quality services that meeting the required professional standards.  Approval of the structure would enable recruitment to commence to secure the services of qualified and experienced staff and reduce anxiety and provide some certainty to staff on their future employment and working arrangements.

  Resolved – That the joint committee approves the Audit, Risk, Fraud and Insurance service structure as set out in appendix A to the report, subject to the formal evaluation and confirmation of the Head of Service grade.