Agenda item

Pre-decision scrutiny of the decision to in-source financial services from the Support Services Outsource (SSO) Contract.

The Committee is asked to scrutinise the decision report and make any relevant recommendations to the Cabinet Member for Economy and Corporate Resources ahead of the decision being taken.

75.1  The Committee considered the Insourcing financial services from Support Services Outsource (SSO) Contract report from the Director of Finance and Support Services (copy appended to the signed minutes).

75.2  The Cabinet Member for Economy and Corporate Resources introduced the report and informed the Committee that the proposed in-sourcing of the financial services team would offer greater flexibility and enable the team to offer improved features to customers, including implementing the Minimum Income Guarantee (MIG). 

75.3  The Committee made comments in relation to the report including those that follow.  It:

·       Commented that the report states the increased pension costs of £160k will be from the “Current cost envelope for service delivery”, and queried what changes will be made to make the £160k available.  The Director of Finance and Support Services confirmed the exact cost rise due to pension auto-enrolment will not be known until the end of the TUPE process, but the salary and pension costs will be met from the Council’s Capita contract budget.

·       Commented that the information is incomplete and insufficient, that the report is not very clear on the financial and resource implications of the decision, and requested clarity on how the estimated saving will be realised.  The Director of Finance and Support Services clarified that the proposed in-source aims to achieve qualitative improvements rather than financial savings.  A reduction in the Capita contract price has been agreed to take into account the cost of the staff TUPE’ing to the Council (excluding pension costs).  A benefit was agreed on top of this to fund a Project Manager to oversee the transfer and manage the backlog of work.  The in-source is a neutral situation and no saving is due to be made as part of this.

·       Requested that the decision report be clarified ahead of the Cabinet Member taking the decision, in particular to clarify the financial and staffing implications and the costs involved to in-source the service. 

·       Queried the reason driving the decision which appears to be being taken quickly given the SSO contract is due to end in two years.  The Cabinet Member for Economy and Corporate Resources explained it is a pragmatic approach and shows a readiness to review service planning.  Discussions on in-sourcing financial services have been ongoing for some time already; there is no urgency to the decision other than to fit into the timetabled process. 

·       A Member commented his own research has shown there are delays in obtaining information requested from Capita to enable Council staff to effectively recover debt, which often prejudices recovery, and queried how much has not been recovered due to Capita delays.  The Cabinet Member for Economy and Corporate Resources will look into this matter for the Committee.

·       A Member commented his own research has shown safeguarding matters are often identified by Council staff that have not been picked up in Capita processes, including potential mis-use of funds by representatives, which results in delays in raising safeguarding alerts and queried whether this is a reason for the in-sourcing.  The Cabinet Member for Economy and Corporate Resources will look into this matter for the Committee.

·       Sought clarity on the £350k lost by the Council as a result of the 18month delay in implementing the decision taken to reduce the MIG rate.  The Director of Finance and Support Services explained there have been issues preventing implementation of the MIG as planned, and following discussions with Capita the agreement to in-source financial services will allow the Council to begin its implementation.

·       A Member requested that the Leader give consideration to asking external researchers and Unison to examine the Council’s outsourcing project as a whole, to establish the true cost of the Council’s move to outsource services and the subsequent piecemeal in-sourcing of services at later dates.  Commented that such changes to services often results in human suffering and delays to service provision.  The Cabinet Member for Economy and Corporate Resources commented that the focus should be on internal scrutiny of the decision rather than recommending external research via Consultants.  The Director of Finance and Support Services added that the Council have commenced procuring a benchmarking exercise to help inform the work of the TFG due to meet in the summer to look at the future of the SSO contract and that this point could also be covered by the TFG.

75.4  Resolved:

1)   That the Committee recognise the reasons for the decision are more qualitative than financial;

2)   That the Committee request the decision report be updated before the decision is taken by the Cabinet Member for Economy and Corporate Resources in order to clarify the financial implications of the decision; and 

3)  That the Committee support the proposal decision for in-sourcing financial services provided the extra financial implication information is included in the Cabinet Members decision report.