Agenda item

Cabinet to consider a report advising that the re-procurement of the responsive repair contract will allow the Council and residents to re-shape the responsive repairs service and to appoint new contractors to ensure housing repairs are carried out effectively and in a timely manner.

The procurement will help ensure that the new contract offers a good quality service and good value for money.

The Executive Mayor, in Cabinet:

RESOLVED: To

1.1   Approve the procurement strategy detailed in this report for up to three contractors to deliver the responsive repairs services and optional planned programme with an initial contract term of 6 years and 8 months with a break option at that point and a total maximum contract duration of 10 years and 8 months (plus a 1 year defects liability period) at an anticipated total contract value of £262.9m. The service is recommended to be split up as follows:

1.1.1     One cross borough contract providing gas related services at an estimated value of £41.9m; and

1.1.2     Two contracts providing the remainder of the responsive repairs service at an estimated value of £221.0m, including optional planned works of up to £64m which shall only be instructed following further approval; in accordance with relevant governance processes.

1.2   The Executive Mayor in Cabinet is recommended to approve that the contact centre be insourced and provided in-house subject to the outcome of an affordability analysis.

1.3   The Executive Mayor in Cabinet is recommended to delegate to the Chair of CCB, in consultation with the Deputy Mayor, the Corporate Director for Housing and the Corporate Director of Resources & S.151 officer the ability to change procurement process from Competitive Procedure with Negotiation (CPN) to the Restricted Procedure prior to issuing the advert in the event that there are further delays to the timetable. Any such change shall be reported within the following Investing in Our Borough Report to Cabinet.

1.4   The Executive Mayor in Cabinet is asked to note that the break option shall follow the same governance process as a permitted extension under the Tenders and Contracts Regulations.

1.5   The Executive Mayor in Cabinet is recommended to delegate to the Chair of CCB, in consultation with the Deputy Mayor, the Corporate Director for Housing and the Corporate Director of Resources & S.151 officer the decision on the appropriate contract value of each of the two responsive repairs areas, once analysis on the optimum area sizing has been completed.

Cabinet considered a report in respect of the re-procurement of the Council’s Responsive Repair Contract, which would allow the Council, and residents, to reshape the responsive repairs service and to appoint new contractors to ensure housing repairs were carried out effectively and in a timely manner.  It was reported that the procurement would help ensure that the new contract offered a good quality service and good value for money.

The Executive Mayor said that during the election he had promised to improve the Council’s housing repairs performance and that ACCESS had given early notice that it wished to exit the current contract.  He said there was an 18 months’ notice period, which allowed the Council time to procure a new provider and to demand high standards, quality and customer service within that new procurement. 

The Executive Mayor invited Mr Martin Wheatley, Chair of the Housing Improvement Board (HIB) to address Cabinet.

Mr Wheatley said that the timetable had not allowed the HIB to take a formal view, however, as Chair of the HIB, he did support the recommendations in the report, but he did offer a few comments and concerns, which he hoped could be taken account of in taking the work forward.  He said he could not emphasise enough how risky managing this re-procurement, alongside bringing the contact centre in-house, was and that it could get worse.  Mr Wheatley asked if more work could be provided in areas such as analysis of risk.  He said the HIB supported the commercial model so long as an appropriate audit regime was in place.  He recognised tenant involvement and stressed that that this needed to be maintained and looked forward to seeing this reflected in the governance arrangements.  He suggested that contract staff be embedded in the in-house contact centre to assist with diagnosis and prioritisation but, more generally, to develop a sense of partnership between the Council and the three contractors to discuss any emerging risks collaboratively.  In conclusion, he said that the Board was pleased to see the emphasis being placed upon social value, most of all opportunities for employment and apprenticeships for tenants and residents, with a strong emphasis on diversity so that the ethnicity of the Borough was recognised. 

The Executive Mayor said that the Council’s Scrutiny and Overview Committee had carried out pre-decision scrutiny of this matter and invited the Committee Chair, Councillor Davis to address Cabinet.

Councillor Davis said that she commended the Executive Mayor’s public commitment to strengthening scrutiny, which, she said, was central to the Council’s rejuvenation.  She said good scrutiny should not just throw out criticisms but should seek positive alternatives and should be about what happened outside the Chamber as well as inside the Chamber.  She said she hoped that scrutiny would become a fearless and critical friend in the Executive Mayor’s mission to restore the pride within the Borough.

Councillor Davis said that the Council had a unique opportunity to change the lives of tenants who were suffering from a service, which was frustrating, at best, and dangerous at worst.

Councillor Davis laid out the process undertaken by the Scrutiny and Overview Committee in coming to its recommendations.  She said that, firstly, three visits had taken place at Regina Road in the north, Cedar and Beech House in New Addington and Cromwell House in the south.  Then, she said, an online community engagement meeting had been held with over 60 vulnerable tenants, the findings from which were detailed in Appendix A to the report. 

Councillor Davis said that, alongside this community engagement meeting, the Committee had interviewed a number of people about best practice in this field.  Overall, she said, both residents and committee members felt the Council had done a competent and professional job of investigating its preferred routes.  She said it was also felt that nothing had been built into these plans that guaranteed a better service for residents so the trust that things would improve, was still not there.

Councillor Davis said that even if this particular route went ahead, repairs would still be delivered by the current ACCESS employees who would be transferred over to the new contractor, via TUPE; that housing staff would remain the same; contract management would not automatically be transformed, and that budget and culture challenges would still exist.

Councillor Davis said that the question pushed by the Committee had been   how or why this service would be different and hoped that the Committee’s recommendations would answer that question.  For clarity, she said, these had been split into four areas: contract options; tenant services; risk and social value. 

Councillor Davis said that, in relation to contract options, residents and committee members liked the idea of bringing the contract centre in-house.  However, she said, the Committee believed that enforcing more or all of the housing repairs service had not been investigated and the Committee had called for this to be done as a matter of urgency.  

With regard to tenant services, Councillor Davis said that Contractors needed stronger incentives if the service was to improve and suggested one way to do that was compensation for tenants, paid for by the contractor, after a failure on their behalf.  The Committee was advised that that this was unlikely since contractors would merely incorporate this into the cost of the contract.  Communication was, she said, another key area for improving tenant services.  She said that residents had repeatedly expressed their desire to check the status of their repairs and to choose their appointment times.

She said that as part of the tenant communication, the Committee also recommended that the tenants’ handbook be updated and redistributed to ensure tenants knew their rights.

In terms of risks, officers had reassured the Committee that allowances had been made for potential cost increases given the current financial climate and that both Plan B and Plan C was in place if the contracting process took longer than was thought.

The biggest risk in the minds of the Committee was, she said, that the new contract would be operated from the same housing office with the same challenges and had therefore recommended that this contract had to be part of the wider housing improvement journey in housing.

With regard to social value, Councillor Davis said the Committee felt that these contributions needed to be tracked and properly evaluated with key performance indicators to make a difference.

In conclusion, Councillor Davis said that Scrutiny was determined to prioritise this work on housing, and it was essential that the Council continued to empower residents in this process.

The Executive Mayor thanked Councillor Davis for her work, and that of her committee, on this issue and recognised the urgency with which, the Committee had considered the matter and the level of detail it had gone into. 

The Executive Mayor said that he had read the Committee’s 13 recommendations very carefully some of which were underway and others, he said, were more than acceptable.  He said there was clearly no timeframe to deal with all 13 at this meeting but said he would bring back a more detailed response to a future meeting of the Cabinet in order that these recommendations could be dealt with directly.  He went on to say that the Committee’s recommendations would not change the recommendation currently to progress with the procurement exercise set out in the report but there was an opportunity to present a report to a future meeting of the Cabinet, that responded to the Committee’s recommendations and proposing how to incorporate that into the procurement as it progressed.

Councillor Chrishni Reshekaron (Shadow Cabinet Member for Homes) asked if the Executive Mayor could confirm whether a financial compensation package would be considered within the contract when the contractors failed to meet certain minimum standards and, also, whether he would be considering the implementation of technology in the form of a website to allow residents to track the progress of their repairs.

In response, the Executive Mayor said that he could not give an answer to those questions this evening since the 13 recommendations needed to be worked through and reiterated that a further report would be presented to a future meeting of the Cabinet which would respond to those recommendations and address those questions then.

In response to two questions by Councillor Stuart King, Leader of the Opposition, officers provided clarification as to the meaning of the reference “sub-optimal” within the report and, on the issue of insourcing the contact centre and the need for this proposal to pass an affordability test, confirmed that work was underway and the likelihood of the affordability test not being met was low risk. 

Accordingly, the Executive Mayor, in Cabinet:

RESOLVED that:

1.            the procurement strategy detailed in the report for up to three contractors to deliver the responsive repairs services and optional planned programme with an initial contract term of 6 years and 8 months with a break option at that point and a total maximum contract duration of 10 years and 8 months (plus a 1 year defects liability period) at an anticipated total contract value of £262.9m, be agreed, with the service being split up as follows:

a)      One cross-borough contract to provide gas related services at an estimated value of £41.9m; and

b)        Two contracts to provide the remainder of the responsive repairs service, at an estimated value of £221.0m, to include optional planned works of up to £64m, which would only be instructed following further approval in accordance with relevant governance processes.

2.            the contact centre be insourced and provided in-house subject to the outcome of an affordability analysis.

3.            the Chair of CCB, in consultation with the Deputy Mayor, the Corporate Director for Housing and the Corporate Director of Resources & S.151 officer, be authorised to change procurement process from Competitive Procedure with Negotiation (CPN) to the Restricted Procedure prior to issuing the advert in the event that there were further delays to the timetable and that any such change be reported within the Investing in Our Borough Report to Cabinet.

4.            the break option to follow the same governance process as a permitted extension under the Tenders and Contracts Regulations, be noted.

5.            the Chair of CCB, in consultation with the Deputy Mayor, the Corporate Director for Housing and the Corporate Director of Resources & S.151 officer be authorised to make the decision on the appropriate contract value of each of the two responsive repairs areas, once analysis on the optimum area sizing had been completed.

6.            That a further report to address the recommendations presented by the Council’s Scrutiny and Overview Committee, be presented to a future meeting of the Cabinet.