## Shared Services & Joint Procurement Board Monday 12 July 2010 (2Pm - 4Pm)

Venue: London Councils, 59 ½ Southwark Street, London SE1 (Room [2]) 
 
Members 
           

Rob Leak - Chief Executive, Enfield (Chair) 
Capital Ambition Programme Board Nathan Elvery - LB Croydon (Deputy Chair) 
SLT 
Jane West - LB Hammersmith & Fulham  (Deputy Chair) 
SLT 
Chris Naylor - LB Tower Hamlets SLT 
Mimi Konigsberg - LB Hounslow ADASS 
Andrew Christie - LB Hammersmith & Fulham ADCS 
Marc Dorfman - LB Haringey ALBPO 
Stephen Tate - GLA 
GLA 
Sally Leigh - LB Lambeth Heads of Procurement Tot Brill - RBK&C 
LEDNET 
John O Brien - Chief Executive, London Councils London Councils Graeme Swinburne - RBKC 
LOTAC 
Mario Varela - London NHS 
NHS London Dean Shoesmith - LB Sutton PPMA 
David Wilde - Westminster SOCITM 
 
Advisors: 
Steve Johnson - Capital Ambition Julia Vernalls - Capital Ambition Kevin Lloyd - Capital Ambition Ken Cole - Capital Ambition Caroline Stanger - Capital Ambition Dennis Skinner - IDeA David Warwick - Government Office for London (GOL) 
In Attendance John NewhamTfL (Item 5) 
Christine Morton, LFEPA (Item 10) 
Dana Skelley, TfL (Item 5) 
Aramide Adeboye Capital Ambition Zerrin Lovett, OGC (Item 5) 
Programme Office, Capital Ambition Liz Gugliotti, Westminster (Item 6) 
 
Rachel Clark, Westminster (Item 6) 
 
Sally Leigh -  Lambeth (Item 7) 
 
Amanda De Swarte, Haringey (Items 8, 9) 

AGENDA ITEMS 1. 
Apologies  


Apologies for absence have been received from Jane West, LBHF;  Marc Dorfman, 
LB Haringey; Nathan Elvery, LB Croydon; Mario Varela, London NHS; Graeme Swinburne, RBKC. 
 
 
2. 
Minutes Of The Last Meeting 


Recommendation: 
 
That the Board approves the minutes of the meeting held on 20 April 2010. 
 
 
Constitutional items 3. 
Revised Governance Arrangements 


Purpose: 
 
To note and comment on the revised governance arrangements for Capital Ambition to end March 2011, including the revised scope and title of the Board, appointment of vice chairs, and to advise on the appropriate level of project funding to be delegated to the Board. A copy of the revised governance chart is attached as Appendix A; the current terms of reference of the Efficiency Board is attached as Appendix B; and the draft terms of reference for the Shared Services and Joint Procurement Board is attached as Appendix C. 
 
 
Recommendations:  
The Board is asked to: 
 
i) 
Note the change of name to the Shared Services and Joint 
Procurement Board; 
ii) 
Appoint two vice chairs for the Board; 
iii) 
Consider and comment on the revised scope and terms of reference of 
the Board and appropriate membership (Appendix C); and 
iv) 
Advise the CAPB on the appropriate level of delegated authority for 
project funding above which proposals will be referred to the CAPB for ratification (currently £250,000). 
 
Programme 
Management 


4. 
Review of Shared Services & Joint Procurement Programmes and Projects 
and Overall Financial Position 


Purpose: To agree the findings from the review of existing projects and 
programmes that relate to shared services and joint procurement. 


Recommendation: 
 
That the Board: 
(i) 
considers the review of existing projects and agrees the individual 
project status as recommended in the report; and  
(ii)        notes the overall Capital Ambition Financial position. 
 
WORK PROGRAMMES 
 
 
5. 
Transforming London Highways Maintenance  


Purpose: To update the Board on the outcomes of Phase 1 and to request funding 
of £274,090 to complete Phase 2 as described in the project Initiation document appended and which should realise at least 10% (£34m) savings per annum. 
 
Recommendation:  
 
That the Board: 
(i) 
Notes the Outline Business Case signed off by TfL, LOTAG and OGC 
(ii) 
Recommends approval of Capital Ambition funding of £274,090 to 
complete the project. 


6. 
Collaborative Procurement: Passenger Transport Services & Vehicles: 
(Westminster and Hammersmith & Fulham) 


Purpose: To consider a request for funding of £237,875 over three years for the 
development and procurement in 2011 of a joint best practice and reduced cost and carbon emissions Passenger Carrier Transport service, that will align with the development of the London Council's pan-London Door-to-Door Strategy.  It is 
anticipated that the joint procurement will achieve cashable savings of at least 5% (£285k) in the first year and will increase significantly as other councils use the new contract. 


Recommendation:  
 
That the Board approves a request for funding of £237,875 over three years for the 
development and procurement in 2011 of a joint best practice and reduced cost and carbon emissions Passenger Carrier Transport service, initially for West London authorities but to be available to all London councils, that will align with the development of the London Council's pan-London Door-to-Door Strategy.   
 
 
7. 
Promoting the Consultancy and Professional Services Procurement project to London authorities 


Purpose:  To receive the closure report for this project and make additional 
recommendations for the future direction of this work. 


Recommendations: 
That the Board: 
i) 
accepts the closure report from London Borough of Lambeth; 
ii) 
considers the recommendations in paragraph 3.2 of the report; and 
iii) 
notes that a further programme of work will be developed and submitted 
to a future meeting of the Board. 
 
 
8. 
London Energy Project - Phase 3 Closure report 


Purpose:   
To receive the Phase 3 closure report and provide the Board with: 
ƒ 
An overview of current significant achievements and efficiency gains/savings 
ƒ 
An overview of key challenges for the future, including re-baselining of savings 
to 2009/10 
ƒ 
The need for continued leadership and support to embed change in boroughs 
and to identify further potential savings and benefits. 
ƒ 
A high level overview of proposed programme activities, deliverables and their 
benefits. 
 
 
Recommendation:  
 
That the Board: (i) 
recognises the achievements and realised benefits in the Phase 3 closure 
report; 
(ii) 
endorses the draft programme of work activities/benefits attached at 
Appendix 2 (subject to re-baselining against 09/10); and 
(iii) 
if the Board recognises the need for LEP to continue on a more 
permanent basis, to consider and resolve future funding and hosting options with key stakeholders appropriate as soon as possible. 
 
9. 
Carbon Reduction Commitment - Pan-London Review  


Purpose:   
This report is intended to provide the Board with: 
ƒ 
Sufficient evidence to authorise a Carbon Reduction Commitment peer review (Health check) service to ensure individual boroughs comply with scheme and avoid costs / inefficiencies 
ƒ 
Sufficient evidence to approve a  Pan-London review of energy efficiency 
measures and opportunities assessment of further potential savings and benefits 
ƒ 
The need for LEP to lead in this new area and support best practice within 
boroughs 
ƒ 
Sufficient evidence to authorise project costs.  This is made up from LEP 
keeping £27k income generated in 2009/10 from licensing the first CRC module to all RIEPs and HE sector and the Board authorising the release of an additional £20k. 
 
 
Recommendations: 
That the Board: 
i) 
Approves the retention of the £27k income generated to part-fund this 
project and release an additional £20k to fully cover the costs of the Health check and Pan-London review; and 
ii) 
Promotes take-up of the Health check service through Society of London 
Treasurers and London Environment Directors Network. 

 
10. 
Supplier Relationship Development - Benefits Realisation 


Purpose: 
 
To consider the attached progress report on benefits realisation for the Supplier 
Relationship Development project as requested at the Efficiency Board meeting on 20 April 2010  


Recommendation: 
That the Board notes and comments on the attached progress report on benefits realisation for the SRD project. 
 
Standing Items 
 
 
11. 
Current issues and AOB 
 
 
12. 
Date of next meeting 


The next meeting of the Shared Services & Joint Procurement Board will be held on 
Tuesday 7 September 2010 from 2.30pm - 4.30pm at London Councils, 59½ 
Southwark Street, London SE1 0AL. 
 
 
13. 
Items for next meeting 
Purpose: To note the forward plan for the meeting to be held on 7 September 2010. 
 
 
Efficiency Board meeting 

## Meeting Held On Tuesday 20 April 2010 (2.30Pm - 4.30Pm)

Venue: London Councils, 59 ½ Southwark Street, London SE1 (Room 4) 
 
Present: 
           

Rob Leak - Chief Executive, Enfield (Chair) 
Capital Ambition Programme Board Nathan Elvery - LB Croydon (Deputy Chair) 
SLT 
Jane West - LB Hammersmith & Fulham  (Deputy Chair) 
SLT 
Mimi Konigsberg - LB Hounslow ADASS 
Sally Leigh - LB Lambeth Heads of Procurement Tot Brill - RBK&C 
LEDNET 
Graeme Swinburne - RBKC (Items 3, 4, 13) 
LOTAC 
Mario Varela - London NHS 
NHS London Dean Shoesmith - LB Sutton PPMA 
David Wilde - Westminster (Items 4 - 13) 
SOCITM 
 
Advisors: 
Steve Johnson - Capital Ambition Julia Vernalls - Capital Ambition Kevin Lloyd - Capital Ambition Ken Cole - Capital Ambition Caroline Stanger - Capital Ambition Steve Pennant - Capital Ambition David Warwick - Government Office for London (GOL) 
In Attendance Aramide Adeboye, Capital Ambition Mark Pacey, Capital Ambition Simon Williams, LB Merton (Items 1 - 4) Mark Brangwyn, London Councils (Items 1 - 4) Jonathan Bruwer, RBKC (Items 1 - 4, 13) Martin Nottage, RBKC (Items 1 - 4, 13) Ian Winter, Department of Health (Items 1 - 5, 13) Ailsa Kirkland, Department of Health (Items 1 - 5, 13) Christine Morton, LFEPA (Items 1 - 6) Ian Nichols, WLA  (Items 6 - 7) Andrew Chinneck, LB Sutton (Item 8) Jonathan Russell, CIPFA (Items 1 - 4,13) Salli Reynolds, Capital Ambition (Items 8 - 12) Debbie Wisdom, Westminster 

AGENDA ITEMS 
 
1. 
Apologies  


Apologies for absence have been received from Chris Naylor, Tower Hamlets; John 
O'Brien, London Councils; Marc Dorfman, LB Haringey; Dennis Skinner, IDeA; Stephen Tate, GLA; 
 
 
2. 
Minutes Of The Last Meeting 


Decision 
 
The Efficiency Board approved the minutes of the meeting held on 15 February 2010.  
 
 
WORK PROGRAMMES 
 
 
Delivering Together 
 
 
3. 
Procurement of a Joint Back Office for Parking - RBKC and LBHF 


The Efficiency Board was asked to consider a bid for further funding for the 
implementation of a shared parking back office to enable the Royal Borough of 
Kensington and Chelsea (RBKC) to provide services, initially relating to Penalty Charge 
Notice Processing, for the LBs of Hammersmith and Fulham (LBHF), and to advise the Capital Ambition Programme Board (CAPB) of: 
i) 
The strength of the Business Case; 
ii) 
Robustness of financial data relating to costs and benefits; and 
iii) 
Whether or not the return on the investment requested meets the Board's 
expectations. 
 
 
Note: As this bid exceeded the £250,000 delegated authority limit for the Efficiency Board, 
the Board was asked to advise the CAPB of the appropriateness of the bid. 
 
 
It was noted that the funding requested was for the worst case scenario. 
 
The Board discussed the scope and level of borough commitment to the project that 
reasonable could be expected to ensure a satisfactory return on investment. 
 
 
Decision: 
The Efficiency Board considered the request for capital and revenue funding totalling £1.6m for the creation of a shared back office service centre for the processing of Penalty Charge Notices in RBKC and LBHF and agreed to forward it to the CAPB subject to : 
i) 
clarity on the full potential of the project i.e. potential for a pan London Back 
Office for Parking, located outside London;  
ii) 
Confirmation of the strength of the Business Case and cost of phasing in future 
tranches of authorities; 
iii) 
Signed expressions of interest from authorities wishing to commit to the project 
at a future stage;  
iv) 
SLT validation on the robustness of the financial data relating to costs, benefits 
and return on investment; and 
v) 
Whether or not the return on the investment requested meets the Board's 
expectations. 
The Efficiency Board noted that the SLT Efficiency sub-group would consider the item at its meeting on 17 May 2010 in time to report to the CAPB on 15 June 2010.  
4. 
Care Funding Calculator 


The Efficiency Board was asked to approve a funding request for the continuation of the 
Care Funding Calculator (CFC) Project. 
 
It was noted that C. £2m auditable cashable savings had been realised to date by 
authorities exploiting the CFC. 
 
Decision:  
The Efficiency Board approved the funding request for £95,000 to complete Phase II of 
the Care Funding Calculator Project. 
 
 
5. 
JIP - Assistive Technology 


The Efficiency Board was asked to consider a bid for funding to enable 10 London boroughs to embed a tailored mainstreamed Assistive Technology (AT) service as part of 
their Adult Social Care customer pathway, achieving both quality & efficiency outcomes. 


Note: As this bid exceeded the £250,000 delegated authority limit for the Efficiency Board 
and as the preferred start date is prior to the next meeting of the CAPB, the Board was asked to consider the bid and recommend approval to the Capital Ambition Operational Sub-Group if appropriate.   


Decision:  
 
The Efficiency Board considered the request for revenue funding totalling £361,269 to enable 10 London boroughs to embed a tailored mainstreamed Assistive Technology (AT) service as part of their Adult Social Care customer pathway, and agreed to forward it to the Operational Sub Group subject to validation of the of cashable savings attributed to 
the Transforming Community Equipment Services project. 


6. 
Supplier Relationship Development 


The Efficiency Board: 
ƒ 
received a report on the outcomes and achievements to date of the London Fire 
Brigade (LFB) Supplier Relationship Development Project (SRD),  
ƒ 
was asked to consider a bid for further funding for Phase 4 which will embed it in 
projects and local authorities by: 
- 
expanding the scope of the Supplier Relationship Development Project 
(SRD) to include consultancy support to work with suppliers from additional categories; 
- 
continuing support for suppliers from the third phase; 
- 
creating an SRD Toolkit; and  
- 
pursuing SRD in a localised setting at London Fire Brigade.         
 
 
Decision:  
 
The Efficiency Board noted the progress to date and approved the request for revenue funding of £215,000 in 2010/11 embed it in projects and local authorities by: 
- 
expanding the scope of the Supplier Relationship Development Project (SRD) to 
include consultancy support to work with suppliers from additional categories; 
- 
continuing support for suppliers from the third phase; 
- 
creating an SRD Toolkit; and  
- 
pursuing SRD in a localised setting at London Fire Brigade.       
Delivering Together (Cont'd) 
 
 
7. 
WLA - Adult Social Care Efficiencies Programme - Shared Management 
Information System 


The Efficiency Board was asked to consider a proposal for funding from the West London Alliance (WLA) for the development of a contracting and performance Management Information System (MIS) to support the realisation of performance improvements and 
savings through the collaborative purchasing of residential and domiciliary care services by six authorities in West London. The Board discussed the effects of deferral of approval for the proposal and noted that: 
i) 
the JIP Office had been asked for comments on the proposal and those 
comments had been tabled (with apologies).  
ii) 
the Chair of the JIP relayed that the JIP Board would be supportive of the 
programme in principle. 
 
 
Decisions: 
The Efficiency Board considered the request for revenue funding of £250,000 for Phase 1 and capital funds of £388,100 for Phase 2 of the Adult Social Care Efficiencies Programme - Shared Management Information System and: 
i)         referred the PID to the JIP Programme Board for comment prior to 
consideration by the CAPB the Programme Board on 15 June; and 
ii) 
asked for further validation of the financial data within the PID. 
 
8. 
Sutton/Merton Joint HR 


The Efficiency Board considered a proposal from the London Boroughs of Sutton and Merton for a total of £50k revenue and £60k capital funding in the two years 2010-2012, to support the continuing development of the joint HR service through shared ICT, improved transactional processing and the development of shared competencies and capabilities. It was noted that the IES model was used to re-organise the structure. 
 
Decision:  
 
The Efficiency Board deferred the approval request for funding from the London Boroughs 
of Sutton and Merton for a total of £50k revenue and £60k capital funding in the two years 2010-2012, pending: 
i) 
Further exploration of the use of the LSPN and other applications to support data 
sharing; 
ii) 
Learning and advice from the project to date being shared more widely and the 
potential of extending to PCTs;   
iii) 
Preparation of rules of engagement for continuing investment in CA projects from 
the Director of Capital Ambition. 
 
9. Collaborative Postal Services Tender Exercise 


The Efficiency Board noted the current situation with the implementation of the new Postal 
Services contract following on from an involvement with fifteen boroughs in 2009. 
Decisions: 
The Efficiency Board: i) 
approved the closure report from Talis; 
ii) 
invited the London boroughs of Camden and Barnet with Capital Ambition to 
produce joint case studies for wider publication to enable other London local authorities to see what has been achieved and the lessons learned; and 
iii) 
requested the London Contracts and Supplies Group (LCSG) to look at the 
options for a fresh tendering exercise for London once the outcomes of the Camden / Barnet work are fully documented. 


10. 
OEA/CRS 
ProClass Mapping Exercise - Outcomes and Way forward 


The Efficiency Board was briefed on the outcomes from the classification and analysis of 
the 2008/9 influenceable third party spend across London, and was asked to approve the requested revenue funding to repeat the exercise for 2009/10 spend and embed the skills and knowledge at sub-regional level. 


Decisions: 
The Efficiency Board: 
i) 
noted the outcomes and achievements from the 2008/9 analysis and 
classification; and 
ii) 
approved funding of £60k to repeat the exercise for 2009/10 spend (£50k) and 
embed the skills and knowledge at sub-regional level (£10k). 
 
Connected London  
 
 
11. 
Converged Networks for London 


The Efficiency Board was asked to approve funding to support the OJEU procurement of a London wide framework for the provision and management of converged voice, data and video networked services, through which London public sector organisations can join up provision, develop shared services and realise significant cost reductions. It was noted that this project was to be led by David Wilde, Westminster City Council. 
 
Decisions:  
The Efficiency Board approved £50,000 of  the £230,000 requested for capital funding to support the OJEU procurement of a London wide framework for the provision and 
management of converged voice, data and video networked services, for use by London public sector organisations subject to: 
i) 
the governance of the project being broadened to include -  
- the GLA CIO group; 
- NHS London;  
- the London Grid for Learning; and 
ii) 
   A principle of the project being to provide Capital Ambition partners with better 
choice of network providers without increasing prices to other partners such as schools. 
iii) 
Further consideration would be given to the remainder of the funding requested following completion of the above actions. 

 
Raising the Bar 
 
 
12. 

Agency EKE 


The Efficiency Board was advised of the closure of the project, "Temporary, Agency and Interim Staff: delivering efficiency savings through procurement", led by London Borough of Havering; and noted the next steps. 


Decisions:  
The Efficiency Board: 
i) 
noted and accepted the closure report from London Borough of Havering; and 
ii) 
noted that a further programme of work will be developed and submitted to a 
future meeting of the Board. 
 
 
Programme Management 
 
 
13. 
CIPFA Efficiency Review 


The Efficiency Board was updated on progress to date on the work commissioned from 
CIPFA in January 2010 to: 
- 
review Capital Ambition's investment in efficiency projects (12 new projects and 
update on previous 17 examined from the last review commissioned in September 2009); and 
- 
develop a benefits realisation tracking tool to understand and monitor the level of 
cashable savings for each project. 


Decisions:  
The Efficiency Board: 
i) 
considered the executive summary and benefits realisation tracking tool from 
CIPFA on the review of cashable savings and non-cashable efficiency gains arising from its investment in efficiency projects;  
ii) 
asked the Director to write to all key project managers, project sponsors and 
Chief Executive outlining the main findings and the action necessary to bring the projects up to the standard required to enable Capital Ambition to calculate and report authoritatively to its key stakeholders, including DCLG; and 
iii) 
asked the Director for a further report on how Capital Ambition planned to 
validate the financial implications of business cases and PIDs in the future. 
 
14. 
Progress and Budget Update for Efficiency Related Projects 
 
 
Decision: 
 
The Efficiency Board noted the report on the status, progress and financial standing of 
Capital Ambition projects and activities with an efficiency focus that report to the Efficiency Board and commented that the report was well written. 
 
Standing Items 
 
 
15. 
Current issues and AOB 
 
It was noted that: 
a) 
there had been ten bids submitted to Capital Ambition for Capital funding and that 
the deadline for receipt of requests had been extended to 30 April 2010. Guidance was sought from SLT representatives to validate the assessment criteria and ROI figures; 
b) 
The Charter Board was to meet on the 13 May 2010 to consider the signature 
projects from the Board's work programme under the heading of likely to 'achieve more from less public spend'. The Chair asked for any Board member comments or suggestions to be sent to Steve Johnson, the deadline for completion is 30 April 2010. 
c) 
The date of the next Efficiency Board meeting clashes with the LGA 2010 
conference in July and that an alternative date would be sought. 
16. 
Date of next meeting 


The next meeting of the Efficiency Board will be held on Monday 12 July 2010,  from 
2pm - 4pm at London Councils, 59½ Southwark Street, London SE1 0AL. 
 
 
17. 
Items for next meeting 
 
To include: 
- 
Outline Strategic Framework Model for Pan London Construction: To 
report back on the establishment of an agreed model for construction for London 
- 
Environmental supply chain assessment - Progress report 
- 
Consultancy EKE - Closure report 
- 
London Efficiency Challenge: Promotion of good practice - to report on how Capital Ambition promotes good practice emerging from LEC 
- 
LEP Closure report  phase 2 - to provide the Board with a  closure report 
(closing May 10) 

ACTION POINTS SCHEDULE 
Item 
Number 
Description 
Action owner 
Action due 
date 
Progress 
3. 
Procurement of a Joint Back Office for Parking - RBKC 
and LBHF 
- 
SLT members are asked to validate the robustness of 
financial data relating to costs and benefits. 
- 
See minutes. Jane West Graeme Swinburne 17/05/10 15/06/10 Pending RBKC and LBHF submitting signed expression of interes from authorities wishing to commit to the project at a future stage 
5. 
JIP - Assistive Technology 
The Board asked that Capital Ambition validates the cashable savings attributed to TCES. Steve Johnson/Ian Winter Prior to CAPB on 15/06/10 Completed Mimi Konigsberge Ian Nichols (WLA) 15/06/10 15/06/10 Completed Completed 
7. 
WLA - Adult Social Care Efficiencies Programme - Shared 
Management Information System 
- 
The Board asked that JIP Programme Board comment on the programme proposal prior to the next CAPB on Board on 15 June. 
- 
Further validation of the finance data and decision making process. 
8. 
Sutton/Merton Joint HR 
- 
See minutes. 
- 
Preparation of rules of engagement for continuing 
investment in CA projects from the Director of Capital 
Ambition. Dean Shoesmith Steve Johnson 12/07/10 12/07/10 Pending completion of work by LB Sutton/Merton  
9. 
Collaborative Postal Services Tender Exercise 
See minutes. Ken Cole 12/07/10 Pending 
| 11.                                                         | Converged Networks for London                             |
|-------------------------------------------------------------|-----------------------------------------------------------|
| -                                                           |                                                           |
|                                                             | The Board asked for the governance of the project to be   |
| broadened (see minutes)                                     |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| David Wilde                                                 |                                                           |
|                                                             |                                                           |
| 12/07/2010                                                  |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Completed                                                   |                                                           |
| 12.                                                         | Agency EKE                                                |
| A programme of work is developed and submitted for approval |                                                           |
| to the Efficiency Board.                                    |                                                           |
|                                                             |                                                           |
| Sally Reynolds                                              |                                                           |
|                                                             |                                                           |
| TBC                                                         |                                                           |
|                                                             |                                                           |
| To be submitted to                                          |                                                           |
| September Board meeting                                     |                                                           |
| 13.                                                         | CIPFA Efficiency Review                                   |
| -                                                           |                                                           |
|                                                             | The Director of Capital Ambition is asked to write to all |
| project managers, sponsors and CEX outline the main         |                                                           |
| findings of the report and actions necessary to bring the   |                                                           |
| report up to the relevant standards for Capital Ambition.   |                                                           |
| -                                                           |                                                           |
|                                                             | A report by the Director of Capital Ambition on how       |
| Capital Ambition plans to validate the financial            |                                                           |
| implications of business cases and PIDs in the future.      |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Steve Johnson                                               |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Steve Johnson                                               |                                                           |
|                                                             |                                                           |
| TBC                                                         |                                                           |
|                                                             |                                                           |
| Overtaken by new assurance                                  |                                                           |
| process developed by                                        |                                                           |
| Capital Ambition Programme                                  |                                                           |
| Office and is pending                                       |                                                           |
| implementation.                                             |                                                           |
| 15                                                          | Current Issues and AOB                                    |
| -                                                           |                                                           |
|                                                             | Comments and suggestions for the Charter Board            |
| meeting on 13 May 2010 to be submitted to the Director      |                                                           |
| of Capital Ambition.                                        |                                                           |
| -                                                           |                                                           |
|                                                             | The next meeting of the Board needs to be rescheduled     |
| as it clashes with LGA conference 2010.                     |                                                           |
|                                                             |                                                           |
| All                                                         |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Aramide Adeboye                                             |                                                           |
|                                                             |                                                           |
| 30/04/2010                                                  |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Completed                                                   |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
|                                                             |                                                           |
| Completed                                                   |                                                           |
| Date of next Board meeting:                                 |                                                           |
| 12 July 2010 (2pm - 4pm)                                    |                                                           |

## Subject: Revised Governance Arrangements

Julia Vernalls, Programme Lead, Delivering Together Report by: 
Email: julia.vernalls@londoncouncils.gov.uk   
Agenda item: 3 
 
Purpose:  To note and comment on the revised governance arrangements for Capital Ambition to end March 2011, including the revised scope and title of the Board, and to advise on the appropriate level of project funding to be delegated to the Board. 

Executive summary:  
At its meeting on 15 June 2010, the Capital Ambition Programme Board (CAPB) approved a new governance structure for Capital Ambition to end March 2011.  The new structure is linked to the main programme strands within Capital Ambition and ensures robust delivery of a reduced and refined programme with clear accountabilities to the Programme Board.  A copy of the revised governance chart is attached as Appendix A. Under the revised arrangements, the Efficiency Board will be known as the Shared Services and Joint Procurement Board and its terms of reference will change to reflect the revised scope. The Programme Board has appointed Rob Leak, Chief Executive of Enfield as the Shared Services and Joint Procurement champion and Chair of the Board. A copy of the current terms of reference for the Efficiency Board is attached as Appendix B, and the Board is asked to  
i) 
Consider and comment on the revised scope and terms of reference of the Board and appropriate membership (Appendix C); and ii) 
Advise the CAPB on the appropriate level of delegated authority for project funding above which proposals will be referred to the CAPB for ratification (currently 
£250,000). 

 

 
Risk: Not applicable 
 
Recommendation: 
The Board is asked to: 
 
(i) 
Note the change of name to the Shared Services and Joint Procurement Board; 
(ii) 
Appoint two vice chairs for the Board; 
(iii) 
Consider and comment on the revised scope and terms of reference of the Board 
and appropriate membership (Appendix C); and 
(iv) 
Advise the CAPB on the appropriate level of delegated authority for project funding 
above which proposals will be referred to the CAPB for ratification (currently £250,000). 
 
 Appendices:  
Appendix A: Capital Ambition Governance Structure 2010/11 Appendix B: Capital Ambition Efficiency Board Terms of Reference Appendix C: New Draft Board Terms of Reference Background papers:  Future Shape Paper: Capital Ambition Programme Board meeting 15 June 2010. 

 

CAPITAL AMBITION PROGRAMME BOARD 
 
EFFICIENCY BOARD 
 
TERMS OF REFERENCE 
 
 
PURPOSE 
 
1. 
Capital Ambition's key values are improvement, efficiency and credibility.  Its vision is 
that the capital's public services will continue to take the lead in innovation, fairness, relevance, efficiency and effectiveness. SCOPE 
2. 
The Capital Ambition Programme Board (the Board) has established the Efficiency 
Board to advise on, guide and oversee the implementation of programmes and projects that address the procurement and efficiency matters referred to in the Improvement and Efficiency Strategy for London (IESL), and any other matters delegated to it from the Board.  
 
ROLES Capital Ambition Programme Board 
 
3. 
The Efficiency Board will support councils and their partners in meeting and 
exceeding their  efficiency savings target and support the Board in its role to: 
 
ƒ Commission research and set the direction for improved performance, service 
transformation and efficiency and capacity building across London Local Government 
ƒ Agree efficiency priorities, goals and targets for Capital Ambition ƒ Encourage participation in and garner support for shared solutions in 
commissioning and service delivery  
ƒ Set criteria for efficiency support for individual and groups of local authorities, 
services and activities. 
ƒ Provide mechanism for challenge in relation to authority and service performance 
on efficiency Efficiency Board 
 
4. 
The Efficiency Board will commission or undertake work on behalf of the Board to: 
 
ƒ Analyse and report on research and data to identify performance improvement 
opportunities and gaps in work stream performance and delivery; 
 
ƒ Consider proposals for procurement,  efficiency and service transformation related 
projects from London public sector professional networks and bodies; ƒ Develop proposals and funding allocations for procurement and efficiency work to 
be commissioned; ƒ Manage, monitor and report on procurement and efficiency related work and 
projects, including any action necessary to correct or remove support from projects not delivering approved outputs and outcomes; 
 
ƒ Monitor and report on participation and collaboration, raising issues needing higher 
level intervention or support; ƒ Measure and report on the return on Capital Ambition funds invested including 
savings generated and improved service outcomes; ƒ Ensure effective marketing and communications of projects, outcomes and 
products and opportunities for sector participation; ƒ Manage any allocated funding. 
 
MEMBERSHIP 5. 
The Efficiency Board will be chaired by the Chief Executive efficiency champion on 
the Capital Ambition Programme Board and will comprise representatives from: 
 
ƒ London Councils ƒ The Greater London Authority ƒ The Society of London Treasurers - 3 members (SLT) ƒ London's professional networks including Directors/representatives of  -  
- Adult Social Services - Children's Services - Environment - Housing - Human Resources - London Heads of Procurement - London Society of Information and Technology Managers (SOCITM) 
ƒ Other professional networks and/or public sector bodies as appropriate  
o London NHS 

## Advisers

 6. 
 Substitute representatives for full members to act in the event of the unavoidable 
absence of a usual officer representative must announce their substitute role at the 
beginning of the meeting or as soon as possible after their arrival.  
 
7. 
Representatives from the Government Office for London and the Improvement and 
Development Agency will act as advisers, and the Efficiency Board may invite advisers from other organisations appropriate to its work programme. 
 
VOTING 8. 
The quorum shall be a minimum of four members, including 2 from the London 
Authorities and one of whom must be from London Councils or a member of CELC 9. 
Each representative (including substitutes) shall have one vote and decisions of the 
Board will be taken on a show of hands (unless otherwise agreed by the Chair) by simple majority vote. In the event of an equality of votes, the Chair will have a second or casting vote. 
 
MEETINGS 10. The Efficiency Board will meet at least quarterly and may call additional meetings as 
required and will be supported by Capital Ambition as appropriate.  
 
11. The Secretary to the Board will give seven clear working days' notice of the time and 
place of meetings of the Efficiency Board together with an agenda of the matters to be considered.   Urgent meetings of the Board of the Board may be called by the 
Secretary with the approval of the Chair.   
 
12. Project Initiation Documents and other proposals must be received no later than ten 
working days before dispatch of the agenda papers to enable proper evaluation and 
recommendations to be formulated. Confidentiality 13. Meetings of the Efficiency Board are confidential and it may decide to consider 
politically and/or commercially sensitive items in private session and exclude non Board members and/or the advisers present.   
 
LIABILITIES 
14. The Efficiency Board has no legal capacity to enter into contracts. 
FUNDING 15. The Capital Ambition Programme Board will determine the level of any delegated 
authority the Efficiency Board may have to fund and/or commission procurement and efficiency related research or work.  Any funding decisions outside the scope of that 
delegated authority will be taken by the Board on the recommendation of the Board.  
 
Emergency Procedure 
16. Where a decision or recommendation regarding funding is needed in advance of a 
scheduled meeting of the Efficiency Board, the Chair may invoke the emergency procedure. AMENDMENTS AND TERMINATION 
17. The terms of reference and period of operation for the Efficiency Board will be 
determined by the Capital Ambition Programme Board.  Amendments to the terms of 
reference may be recommended by any member of the Efficiency Board and will be submitted to the Capital Ambition Programme Board for ratification.  
John O'Brien Chief Executive, London Councils Revised 12 January 2010 

CAPITAL AMBITION 
 
SHARED SERVICES AND JOINT PROCUREMENT BOARD 
 
TERMS OF REFERENCE VISION  
 
1. 
Capital Ambition's vision is that London's public services will continue to take the lead in efficiency, innovation, fairness, relevance and effectiveness.   
 
PURPOSE 
 
2. 
Capital Ambition's key focus is on efficiency, aligned with improvement, innovation, service transformation and workforce reform. 
 
3. 
Capital Ambition supports councils and their partners in delivering the shared priorities for 
their local areas (as expressed in their Local area Agreements targets); and in meeting their efficiency targets. Capital Ambition's values are efficiency, mutuality, improvement, and credibility. 
 
4. 
London's public services would expect to challenge and support themselves.  But Capital Ambition recognises that the current architecture of support and regulation has many other players.  So it will coordinate its work with that of the other stakeholders in London's efficiency and improvement architecture; and Capital Ambition will position itself as the 'hub' of efficiency and improvement activity in the capital.  It is also committed to learning from - and sharing with - other regions outside London, and other world cities that share some of its challenges. SCOPE 
5. 
The Capital Ambition Programme Board has established the Shared Services and Joint Procurement Board (the Board) to advise on, approve, oversee and assure the implementation of programmes and projects that deliver significant cashable savings whilst maintaining desired levels of service.     
 
6. 
The majority of the work will be achieved through: 
 
-  collaboration in the planning, design, development, procurement, management and/or 
delivery of shared services and assets / joint contracting, including innovative forms of 
shared service delivery and asset utilisation;  
 
-  the standardisation of specifications and aggregation of services and volumes to enable 
joint procurement and the delivery of the London Procurement Strategy; and 
 
- Maintaining and improving the infrastructure and delivery mechanisms 
 
- Improving the utilisation of resources needed to support the above collaboration. ROLES 
 
7. 
The Shared Services and Joint Procurement Board will support councils and their partners in 
meeting and exceeding their cashable savings target through shared services and joint procurement, and the provision of infrastructure and resources, and will: 
 
ƒ Encourage, monitor and report on participation in collaboration and shared solutions in 
commissioning, procurement and service management and delivery raising issues needing higher level intervention or support as appropriate; 
ƒ Commission, consider and decide on1, or recommend approval of, proposals and strategic 
outline business cases requesting funding for the delivery of significant cashable savings to support collaboration from clusters of London authorities, their public sector partners and other professional networks and bodies; ƒ To receive evidence from the Portfolio, Investment, Management and Monitoring Group on 
the history and current position of each project as it enters and passes through the 
assurance process and to provide approval to move to the next stage and/or take action 
necessary to correct or remove support from projects not delivering approved outputs and outcomes; ƒ Manage any allocated funding and report on the return on investment and the delivery of 
cashable savings and improved service outcomes arising from Capital Ambition funds invested; ƒ Ensure effective marketing and communications of projects, outcomes and products and 
opportunities for sector participation. 
 
MEMBERSHIP 
 
8. 
The Shared Services and Joint Procurement Board will be chaired by the Chief Executive 
champion on the Capital Ambition Programme Board and will comprise representatives from: 
 
ƒ London Councils (including the nominees from the Chief Executives' London Committee) ƒ The Greater London Authority ƒ The Society of London Treasurers - 3 members (SLT) ƒ London's professional networks including Directors/representatives of  -  
- 
Adult Social Services  
- 
Children's Services 
- 
Environment  
- 
Highways and Transportation 
- 
Housing  
- 
Human Resources 
- 
Planning  
- 
Procurement 
- 
Information and Technology Managers 2 
ƒ London NHS ƒ London Universities Purchasing Consortium (LUPC) 
ƒ Other professional networks and/or public sector bodies as appropriate  
 
Substitutes 
 
9. 
 Substitute representatives for full members to act in the event of the unavoidable absence of 
a usual officer representative must be notified before the meeting and announce their 
substitute role at the beginning of the meeting or as soon as possible after their arrival.  
 
                                                
 

## Advisers

 
10. 
Representatives from Capital Ambition and the Improvement and Development Agency will act as advisers, and the Board may invite advisers from other organisations appropriate to its work programme. 
 
VOTING 
 
11. 
The quorum shall be a minimum of four members, including 2 from the London local authorities and one of whom must be from London Councils or a member of CELC 
 
12. 
Each representative (including substitutes) shall have one vote and decisions of the Board will be taken on a show of hands (unless otherwise agreed by the Chair) by simple majority vote. In the event of an equality of votes, the Chair will have a second or casting vote. 
 
MEETINGS 
 
13. 
The Shared Services and Joint Procurement Board will meet at least quarterly and may call 
additional meetings as required and will be supported by Capital Ambition as appropriate.  
 
14. 
The Secretary to the Board will give five clear working days' notice of the time and place of meetings of the Board together with an agenda of the matters to be considered.   Urgent 
meetings of the Board of may be called by the Secretary with the approval of the Chair.   
 
15. 
Strategic Outline Business Cases and other proposals must be taken through the Capital Ambition assurance process and be received no later than ten working days before dispatch 
of the agenda papers to enable proper evaluation and recommendations to be formulated. Confidentiality 
 
16. 
Meetings of the Shared Services and Joint Procurement Board are confidential and it may decide to consider politically and/or commercially sensitive items in private session and 
exclude non Board members and/or the advisers present.   
 
LIABILITIES 
17. 
The Shared Services and Joint Procurement Board has no legal capacity to enter into contracts.   
 
FUNDING 
 
18. 
The Capital Ambition Programme Board will determine the level of any delegated authority the Shared Services and Joint Procurement Board may have to fund and/or commission shared services, procurement and related work.  Any funding decisions outside the scope of that delegated authority will be taken by the Capital Ambition Programme Board on the 
recommendation of the Shared Services and Joint Procurement Board.  
 
Emergency Procedure 
19. 
Where a decision or recommendation regarding funding is needed in advance of a scheduled meeting of the Shared Services and Joint Procurement Board, the Chair may invoke the emergency procedure. 
 
AMENDMENTS AND TERMINATION 
20. 

The terms of reference and period of operation for the Shared Services and Joint Procurement Board will be determined by the Capital Ambition Programme Board. Amendments to the terms of reference may be recommended by any member of the Shared Services and Joint Procurement Board and will be submitted to the Capital Ambition Programme Board for ratification. John O'Brien Chief Executive, London Councils Revised 12 July 2010 

## Project/Subject: Review Of Shared Services & Joint Procurement Programmes And Projects And Overall Financial Position

Report by: 
Julia Vernalls and Caroline Stanger, Programme Leads, Shared Services and Joint Procurement 
Agenda item: 4 
julia.vernalls@londoncouncils.gov.uk 
caroline.stanger@londoncouncils.gov.uk 

 
Purpose:  To agree the findings from the review of existing projects and programmes that relate to shared services and joint procurement. 

## Financial Implications 2010/11: Potential Clawback Of Funds From Discontinued Projects, Of £241K. These Resources Will Add To The Funds Available For Reinvestment In The Capital Ambition Programme.

Executive summary:  
 
At its meeting on 15 June 2010, the Capital Ambition Programme Board agreed that all sub Boards should review their existing projects to consider whether to continue investment, scale back or where appropriate, discontinue funding in order to release funding for re-investment in priority areas alongside the recently confirmed final instalment of central Government funding. A review of all projects has been undertaken by the Programme Leads, supported by the Programme Management Office.  Projects were evaluated against three key criteria: (i)  potential to deliver significant efficiency savings (ii) level of participation (including potential for expansion) (iii)stage in project lifecycle. [discussion with boroughs] The output from this work is contained in Appendix A. 5 Projects have been recommended for discontinuation of funding.   These for the most part have not started or incurred any expenditure.  If agreed, approximately £241k of revenue funding will be released for allocation to new projects. A further 4 projects are subject to further discussion.  This may or may not result in the discontinuation or reduction of funding.  Appropriate recommendations will be made to the next meeting of the Shared Services and Joint Procurement Board but it is anticipated that there will be scope to claw back some additional funds. The current overall Capital Ambition financial position is contained in Appendix B.  The available funding does not factor in funding requests being considered at this meeting, or funding that may become available through discontinued projects. The Programme Board also asked for further work to be undertaken on how any Capital Ambition legacy might be funded which may have implications for the way in which new projects are funded for the remainder of 2010/11. The Programme Board will consider this further at its meeting on 27 July 2010. 

 

 
Risk:  All projects recommended for continuation will undertake a risk assessment against a range of criteria focused on delivery of the intended benefits.  

Recommendations 
That the Board: 
(i) 
considers the review of existing projects and agrees the individual project status as 
recommended in the report; and 
(ii) 
notes the overall Capital Ambition Financial Position. Appendices: 
Appendix A - Review of Shared Services & Joint Procurement Programmes and Projects Appendix B - Capital Ambition Overall Financial Position - July 2010 

## Review Of Shared Services & Joint Procurement Programmes And Projects Recommended To Continue

| Project Programme Package Name                        | Brief rationale for final recommendation             |
|-------------------------------------------------------|------------------------------------------------------|
| Number of Boroughs                                    |                                                      |
| Currently Involved                                    |                                                      |
| Overall                                               |                                                      |
| Progress                                              |                                                      |
| Potential for expansion                               |                                                      |
| Total Investment                                      |                                                      |
| Agreed to Date                                        |                                                      |
| Total Claims to Date                                  | Variance                                             |
| JIP - Transforming Community Equipment                |                                                      |
| Services in London                                    |                                                      |
| Savings doubled to £5.6m. Project on time to deliver  |                                                      |
| by August 2011                                        |                                                      |
| All                                                   | On Track                                             |
| London Energy Project (All Phases)                    | High level of cashable savings across London of £252 |
| million by 2015. Potential for further savings from   |                                                      |
| smarter use/reduction in energy consumption.          |                                                      |
| All                                                   | On Track                                             |
| Environmental Supply Chain Assessment for             |                                                      |
| the London Boroughs                                   |                                                      |
| First year complete. Contractual commitment to        |                                                      |
| second phase.  Entering into profit share agreement   |                                                      |
| with Trucost and should recover full cost of project. |                                                      |
| All                                                   | On Track                                             |
| London Procurement portal hub initiative (all         |                                                      |
| phases)                                               |                                                      |
| Key resurce for future joint procurement and          |                                                      |
| collaboration and an enabler for easier SME access to |                                                      |
| public sector contracts.                              |                                                      |
| 11                                                    | On Track                                             |
| wider public sector                                   |                                                      |
| 492,940                                               | 49,176                                               |
| JIP - Assistive Technology                            | Approved by CAPB 15 June 2010. Cashable savings      |
| of £10m p.a. forecast.                                |                                                      |
| TBC                                                   | On Track                                             |
| East London Shared Solutions (ELSS)                   | Continue - significant engagement across the region  |
| and potential for high level of savings               |                                                      |
| 6                                                     | On Track                                             |
| other sub regions                                     |                                                      |
| following similar                                     |                                                      |
| approaches                                            |                                                      |
| 338,000                                               | 90,495                                               |
| Cultural Improvement Programme - London               |                                                      |
| Library Change Programme (Phase 3)                    |                                                      |
| Up to £30 million cashable saving by 2015 - very      |                                                      |
| strong support from all boroughs                      |                                                      |
| 33                                                    | Behind                                               |
| Schedule                                              |                                                      |
| (management                                           |                                                      |
| controls now in                                       |                                                      |
| place)                                                |                                                      |
| TBC                                                   | 250,000                                              |
| Commercial Vehicles Study London Study                |                                                      |
| Outcomes (formerly Category Mgmt -                    |                                                      |
| Vehicles)                                             |                                                      |
| Some DfT ring fenced funding. Project manager being   |                                                      |
| appointed. Should achieve 10% savings on £100m        |                                                      |
| p.a. spend on procurement and maintenance of          |                                                      |
| commercial fleet.  Best practice guidance on          |                                                      |
| procurement options appraisal.                        |                                                      |
| 20                                                    | On Track                                             |
| Online Expenditure Analysis                           | Essential to Pan London Procurement Portal and       |
| future procurtement strategy support                  |                                                      |
| All                                                   | On Track                                             |
| Project Programme Package Name                          | Brief rationale for final recommendation          |
|---------------------------------------------------------|---------------------------------------------------|
| Number of Boroughs                                      |                                                   |
| Currently Involved                                      |                                                   |
| Overall                                                 |                                                   |
| Progress                                                |                                                   |
| Potential for expansion                                 |                                                   |
| Total Investment                                        |                                                   |
| Agreed to Date                                          |                                                   |
| Total Claims to Date                                    | Variance                                          |
| Strategic Supplier Initiative (SSI) Project             |                                                   |
| Phase 4                                                 |                                                   |
| Extended to ICT, Highways and Construction              | TBC                                               |
| Climate Change - Decentralised Energy                   |                                                   |
| Network projects                                        |                                                   |
| London wide engagement and key partnership              |                                                   |
| project.  Real potential for significant CO2 reductions |                                                   |
| 19                                                      | On Track                                          |
| London Boroughs Legal Alliance for Shared               |                                                   |
| Services Professional Service                           |                                                   |
| High level of engagement from partner boroughs and      |                                                   |
| sub-regions wishing to joing in the project.  Potential |                                                   |
| cashable savings of £10.4 million by 2015               |                                                   |
| 8                                                       | On Track                                          |
| E-Auctions - ICT                                        | PID to SSJP Board September 2010 £60k for e-      |
| auction; SRD & extended castegory scope. Cashable       |                                                   |
| savings.                                                |                                                   |
| 16                                                      | On Track                                          |
| North London Strategic Alliance (NLSA)                  |                                                   |
| Cashable Savings Project                                |                                                   |
| Project has only just commenced - there is potenitial   |                                                   |
| for cashable savings and also increased take-up of      |                                                   |
| other CA projects e.g. LBLA                             |                                                   |
| 6                                                       | On Track                                          |
| other sub regions                                       |                                                   |
| following similar                                       |                                                   |
| approaches                                              |                                                   |
| 160,000                                                 | 0                                                 |
| Climate Change - Homes Retrofit                         | London wide engagement and key partnership        |
| project.  Real potential for significant CO2 reductions |                                                   |
| 9                                                       | On Track                                          |
| National Care funding calculator Phase II               | Project manager appointed for 2010/11. Potential  |
| efficiency savings of £11 million                       |                                                   |
| 16                                                      | On Track                                          |
| Delivering value through London Cultural                |                                                   |
| services - Working with children services               |                                                   |
| Work has only just commenced but has significant        |                                                   |
| engagement across all Boroughs                          |                                                   |
| 33                                                      | On Track                                          |
| Proclass Authority Mapping                              | Work commissioned for completion with 09/10 OEA   |
| some PCT e.g. H&F                                       |                                                   |
| 60,000                                                  | 24,650                                            |
| Category Mgmt - Highways                                | PID to SSJP Board 12 July for £256k to complement |
| £750k TfL funding to complete the work.  Minimum        |                                                   |
| 10% savings on £300m spend p.a.                         |                                                   |
| TfL and 31                                              | On Track                                          |
| Project Programme Package Name                        | Brief rationale for final recommendation   |
|-------------------------------------------------------|--------------------------------------------|
| Number of Boroughs                                    |                                            |
| Currently Involved                                    |                                            |
| Overall                                               |                                            |
| Progress                                              |                                            |
| Potential for expansion                               |                                            |
| Total Investment                                      |                                            |
| Agreed to Date                                        |                                            |
| Total Claims to Date                                  | Variance                                   |
| Delivering value through London Cultural              |                                            |
| services - Heritage change programme                  |                                            |
| Work just started and will  be crucial in the current |                                            |
| environment                                           |                                            |
| 33                                                    | On Track                                   |
| Collaboration in Construction - Outline               |                                            |
| Strategic Framework Model for Pan London              |                                            |
| Construction                                          |                                            |
| Report to be delivered mid July 2010                  | TBC                                        |
| Establishment of the South East London                |                                            |
| Shared Services Partnership                           |                                            |
| Project has just commenced - part of strategy for     |                                            |
| supporting sub-regional partnerships                  |                                            |
| 6                                                     | On Track                                   |
| other sub regions                                     |                                            |
| following similar                                     |                                            |
| approaches                                            |                                            |
| 45,000                                                | 0                                          |
| London Procurement Training Programme                 |                                            |
| (training renewal project)                            |                                            |
| Out to tender by Tower Hamlets                        | TBC                                        |
| Local Authority shared systems for film               |                                            |
| applications                                          |                                            |
| Project is nearly complete and has already delivered  |                                            |
| most of the targets in the PID                        |                                            |
| 10                                                    | On Track                                   |
| Contract Register Service - London Wide               |                                            |
| Enablement                                            |                                            |
| Essential to Pan London Procurement Portal and        |                                            |
| future procurtement strategy support                  |                                            |
| All                                                   | On Track                                   |
| Collaboration in Construction - Review of             |                                            |
| Framework contracts                                   |                                            |
| £3bn spend across London. Based on highways           |                                            |
| collaboration should achieve significant savings 10%+ |                                            |
| through use of standard specifications, frameworks    |                                            |
| and e-auctions                                        |                                            |
| All being consulted                                   | On Track                                   |

## Recommended To Discontinue

| Project Programme Package Name             | Brief rationale for final recommendation               |
|--------------------------------------------|--------------------------------------------------------|
| Number of Boroughs                         |                                                        |
| Currently Involved                         |                                                        |
| Progress                                   |                                                        |
| Number of potential                        |                                                        |
| addition Boroughs                          |                                                        |
| (Scaleability)                             |                                                        |
| Total Investment                           |                                                        |
| Agreed to Date                             |                                                        |
| Total Claims to Date                       | Variance                                               |
| Climate Change - Borough Best Practice     | Not started - superseded by climate change skills fund |
| Pension Administration                     | No project developed                                   |
| National E-Auctions Project                | Low interest from HoP                                  |
| Category Mgmt - Catering and Food Supplies | No scope for significant efficiency savings            |
| Project Programme Package Name   | Brief rationale for final recommendation   |
|----------------------------------|--------------------------------------------|
| Number of Boroughs               |                                            |
| Currently Involved               |                                            |
| Overall                          |                                            |
| Progress                         |                                            |
| Potential for expansion          |                                            |
| Total Investment                 |                                            |
| Agreed to Date                   |                                            |
| Total Claims to Date             | Variance                                   |
| E-Auctions - Building Materials  | Covered by construction project            |

## Recommended For Further Discussion

| Project Programme Package Name                          | Brief rationale for final recommendation   |
|---------------------------------------------------------|--------------------------------------------|
| Number of Boroughs                                      |                                            |
| Currently Involved                                      |                                            |
| Progress                                                |                                            |
| Number of potential                                     |                                            |
| addition Boroughs                                       |                                            |
| (Scaleability)                                          |                                            |
| Total Investment                                        |                                            |
| Agreed to Date                                          |                                            |
| Total Claims to Date                                    | Variance                                   |
| Integrating Public Services in Hammersmith              |                                            |
| and Fulham                                              |                                            |
| Should not agree continuation of this project until we  |                                            |
| have reviewed to ensure that it is on target to deliver |                                            |
| against clear outcomes.                                 |                                            |
| N/A                                                     | Review                                     |
| Development of a Centre of Excellence for               |                                            |
| Parking Back Office functions (RBKC and                 |                                            |
| LBHF)                                                   |                                            |
| Decision on funding for implementation deferred         |                                            |
| pending sign up of more authorities.                    |                                            |
| N/A                                                     | Review                                     |
| Exploring greater integration between LB                |                                            |
| Waltham Forest and Waltham Forest NHS                   |                                            |
| Project does not seem to be progressing and final       |                                            |
| results are unclear. On hold, possible outcomes not     |                                            |
| clear.                                                  |                                            |
| N/A                                                     | Review                                     |
| Passenger Transport Services                            |                                            |
| Commissioning Hub (approved in principle,               |                                            |
| £30k released by the Efficiency Board in                |                                            |
| November 09')                                           |                                            |
| First phase completed.  This funding relates to the     |                                            |
| Phase 2 of the project                                  |                                            |
| N/A                                                     | Review                                     |
£
£
| Balance Brought Forward from 31 March 2010                  | Revenue      | Capital                                       | Total                                                    |
|-------------------------------------------------------------|--------------|-----------------------------------------------|----------------------------------------------------------|
| Revenue balance brought forward                             | 10,084,113   | 0                                             | 10,084,113                                               |
| Capital balance brought forward                             | 0            | 6,769,318                                     | 6,769,318                                                |
| Total                                                       | 10,084,113   | 6,769,318                                     | 16,853,431                                               |
| (Cash in bank H & F - 1.4.10)                               |              |                                               |                                                          |
| Add New Grants and Subscription Funding                     |              |                                               |                                                          |
| CLG RIEP Funding (Revenue)                                  | 6,928,875    | 0                                             | 6,928,875                                                |
| CLG RIEP Funding (Capital)                                  | 0            | 769,875                                       | 769,875                                                  |
| Climate Change Skills Fund                                  | 1,040,000    | 0                                             | 1,040,000                                                |
| London Connects Subscription                                | 330,000      | 330,000                                       |                                                          |
| Total                                                       | 8,298,875    | 769,875                                       | 9,068,750                                                |
| Total Gross Funding                                         |              |                                               |                                                          |
| 18,382,988.00                                               | 7,539,193.00 | 25,922,181.00 (Total Gross Funding Available) |                                                          |
| Less                                                        |              |                                               |                                                          |
| Forecast Central Hub Costs                                  | 1,800,000    | 0                                             | 1,800,000 (£1,301,000 in salaries and consultancy costs) |
| Accruals from 2009/11                                       | 6,982,692    | 0                                             | 6,982,692                                                |
| Existing 2009/10 Commitments (planned to be paid in 2010/11 | 5,250,587    | 0                                             | 5,250,587                                                |
| New 2010/11 Commitments (since 1.4.10)                      | 1,035,189    | 0                                             | 1,035,189                                                |
| Climate Change Skills Fund Project(s)                       | 1,040,000    | 0                                             | 1,040,000 (On hold subject to CLG review of funding)     |
| Total                                                       | 16,108,468   | 0                                             | 16,108,468                                               |
| Balance Available                                           |              |                                               |                                                          |
| 2,274,519.97                                                | 7,539,193.00 | 9,813,712.97                                  |                                                          |
| (Total Net Funding Available)                               |              |                                               |                                                          |

## Project: Transforming London Highways Maintenance

Ken Cole, Procurement and Commercial Advisor Report by: 
Email: ken.cole@londoncouncils.gov.uk  
Agenda item: 5 

## Strategic Theme: Delivering Together

 
Purpose: To update the Board on the outcomes of Phase 1 and to request funding of £274,090 
to complete Phase 2 as described in the project Initiation document appended and which should realise at least 10% (£34m) savings per annum. 

## Financial Implications 2010/11: Capital Ambition Revenue Funding

Financial Year 
Committed/Spend In Year Total 
Balance 
 
New Funding Request 
Existing Project Approval 
2009/10 and 2010/11 
53,000 
22,090 
30,910 
 
274,090 
327,000 
2010/11 
30,000 
30,000 
0 
 
 
30,000 
Totals 


274,090 
357,000 

## Other Funding

Financial 
Year 
Committed/Spend 
In Year Total 
Balance 
 
New Funding 
Request 
Existing Project 
Approval 
2010/11 
TfL  
700,000 
- 
 
- 
700,000 
2010/11 
OGC 
40,000 
- 
 
- 
40,000 
Total 


740,000 
 
Capital Ambition & Partner Total 
 
 
1,097,000 


| Total          | Existing    |
|----------------|-------------|
| Approval + New |             |
| Funding        |             |
| Request        |             |
| Total          | Existing    |
| Approval + New |             |
| Funding        |             |
| Request        |             |

Executive summary:  
There are currently circa 100 contracts in place to manage London's Highway network with an annual value of £350 million. These contracts range in value from £40k to £33 million per annum with identified annual costs of preparation of £1.2million and subsequent costs of management and supervision in the order of £20 million. The market is dominated by five providers, with two of the providers accounting for nearly 60% of the expenditure. Work carried out under Phase 1 of the attached business case shows significant variations in costs for similar types of activities. Returns from 26 boroughs showed that there was a 15% difference between the lowest and average borough costs based on existing contracts indicating a potential £34M across saving across London.  There were also other wide variations on costs in like for like areas such as electrical testing. Phase 2 of this project will look to rationalise the number of contracts; reduce the costs of preparation and management, and move to fewer more standardised contracts (4/5 across London), which will reduce the variations in costs and reduce the overall cost of this sector of activity within London.  The project will be seeking to deliver £24m across London as a minimum with a further one off saving of £1m from reduced contract preparation costs. TfL is looking for savings of at least 10%, which is approximately £10m, totalling £34m. There are also unquantified benefits which include: 
- 
Simplifications of the supply chain 
- 
Use of e-Auctions for materials 
- 
Reduced tendering costs 
- 
Core specifications 
- 
Consistent approach to efficiency and performance management 
- 
Improved coordination of road works and enhanced risk management The project has some excellent backers including TfL, OGC, LOTAG (Highways Network in 
London) and will be sponsored by Martin Smith (CEO) of LB Ealing. SLT have also been approached to provide a contact. In terms of funding, TfL will provide £700k and OGC £40k in kind funding (services of Zerrin Lovett). In terms of delivery there are three strands: 
- 
Movement towards a common contract, with sub-regional variants.  East London 
Solutions are planning to lead on the latter 
- 
E-Auctions starting with electrical testing but also rapidly moving towards standardise 
materials.  Five other regions have agreed in principle  to join forces with London in this area 
- 
A proactive SRD programme targeted at FM Conway and Volker, and with three other 
provider in reserve Work is already advancing on the second and third points with good progress in both areas. Full details are available in the PID. 
 
 
Risk: The project will cease immediately without the funding and the opportunities identified will be lost. 


Recommendations: 
 That the Board: 
(i) 
Notes the Outline Business Case signed off by TfL, LOTAG and OGC 
(ii) 
Recommends approval of Capital Ambition funding of £274,090 to complete the 
project. 
 

## Appendices: Appendix A: Business Case Appendix B: Pid Appendix Bi: Cashable Savings Model Appendix Bii: Key Activities And Milestones Appendix Biii: Risk And Issues Register Appendix Biv: Governance Arrangements Appendix C: Communications Strategy Background Papers: None Pan London Collaborative Highway Works: Business Case - Executive Summary

Of the Questionnaires sent to the 32 Boroughs, the City of London and TfL we received 26 returns, a return rate of 75%. The **total highway spend** identified by the 25 Boroughs was £265m/annum, which when grossed up for the 33 Boroughs and TfL would give **£407m**. (This excludes those Authorities Street Lighting Activities which are PFI's.) 
Of this the Boroughs identified a **total highway works spend** of £169m/ annum ( 
excluding PFIs) which when grossed up for London, including  TfL , would indicate a spend on works of **£284million**, or just 2/3 rds of the total Highway spend. The balance of the spend will be Highway Client activities and management/ supervision of the contracts. In total the 25 Boroughs and TfL identified they had a total of 76 Highway Contracts which **averaged 3 contracts per Authority**. The contract value ranged from £40k to circa £20million, with an average Borough value of £2.3million, although this increases to £3.0million when the TfL contracts were taken into account. They covered single activities such as emergency response right through to multi disciplinary covering all activities on the highway. The periods they covered were from one year to 20 years with an average contract period of 6 years. The **average cost of preparation** of the Contracts was £73k, which would equate to a total cost across **London of circa £7million** over the average period of the contracts.(This is felt to be conservative as the cost of contract preparation nationally has been identified as ranging from £100k (Midlands Highway Alliance) up to £250k, with an average figure commonly quoted as £150k, OGC use a figure of £165k, which would give a potential London range of £10-£25million with an average of £15 million.) 
In addition to the cost of preparing the contracts a further cost of **£22m/ annum** was identified in their subsequent **contract management and supervision.** 
In order to identify the potential savings from aggregation of the contracts contract models were developed for both inner and outer Boroughs for both carriageway and footway based on the returns received. From the two options costed, one based on  savings for those Boroughs above the average cost operating at the average and the other on all Boroughs operating at the cheapest identifiable contract available, possible savings on works of between 5- 15% could be made by the Boroughs on the overall works spend which equated to £11-34million. (Nationally, pathfinders looking at highway works have identified cost savings conservatively in the region of 4 - 10% can be achieved immediately from aggregation and better coordination). 

With the possible savings identified no account has been taken of potential savings from the reduced cost of tendering or the use of common specifications. 

The **cheapest overall contracts** for both Inner and Outer London were as a result of single larger contracts being let, not as a result of multiple contracts, and were contractors who had a larger share of the market not niche local contractors.  
Over 30 Contractors in total across the 25 Boroughs and TfL with **5 Contractors** 
having over **50% of the Contracts and 80% of the value**. Within the 76 contracts identified, one contractor has 13 just with the Boroughs alone, with a total value of around £46m/ annum, just short of 30% of the total Borough contract value. A further contractor has 9 Borough Contracts, with a value of £41.5m or 25% of the market. 

Whilst there appears to be good competition in the market **2 contractors** alone have cornered over 50% of the Borough market in value terms. A **cost benefit analysis** based on 100% of the Boroughs in London participating would indicate a **return of 41.3:1, reducing to 7.0:1** if a sensitivity analysis is applied using the lower levels of savings and a participation rate of 46%. In addition to considering larger collaborative contracts pan London a hierarchy of quick wins have also been identified to achieve some of the potential savings identified: 

- E - Auctions for material and specialised activities - Service Development Reviews - Common Specifications 
- Price Benchmarking - Common systems - Sharing of Best Practice 
 

## Transforming London Highways Maintenance

Note: Please ensure title clearly describes the remit of the project 
before initiation. Capital Ambition may rename a project for clarity 
and to differentiate it from others. 
Lead Authority: 
Transport for London 
Project Sponsor: 
Dana Skelley (TfL)(Programme Director) and Martin Smith (CEO LB-Ealing)(Capital Ambition Programme Sponsor) 
Project Manager: 
Chris Tunstall (Programme Manager) 
Project Manager Contact Details:  
tunstallassociates@talktalk.net, mobile 07595303904 
Author: 
Chris Tunstall 
Date: 
18th June 2010 
Project Start date 
01/04/10 
Project End Date 01/04/2013 

Please note: Capital Ambition does not support projects that benefit single authorities. Proposals should usually be joint submissions or be submitted by a lead partner on behalf of others. In exceptional circumstances Capital Ambition may support a bid but it must demonstrate specifically the value of outcomes and learning and how it can then be transferred to other organisations. 

## Revision History - Please Ensure That You Keep Track Of Your Revisions Using This Version Control Log.

|     | Version Created    | Reasons for/Summary of Changes    | Author         |
|-----|--------------------|-----------------------------------|----------------|
| 0.1 | 18/06/2010         | Draft                             | Chris Tunstall |
| 0.2 | 05/07/2010         | Final Draft                       | Chris Tunstall |
|     |                    |                                   |                |
|     |                    |                                   |                |
|     |                    |                                   |                |
|     |                    |                                   |                |

## 1. Project Overview 1.1 Project Summary (Maximum 100 Words)

 
The pan London highways project, will in conjunction 
with its partners, reorganise and provide collaborative and shared contracts across London and potentially into the home counties for the provision of  
maintenance works to the highway network, the supply of services and the provision of materials. 
The potential value of this sector of work across the 
Boroughs and TfL in London is circa £350 million. To achieve savings on this spend now and in the future 
there are a number of key but interlinked projects being 
progressed; Supplier Relationship Development with the 2 key existing suppliers; common specifications; common contract conditions; and e-auctions for services and materials. 
Note: Please provide a brief summary with a maximum 100 words.  You 
will have the opportunity to describe the detail of the project in Section 2. 

## London Technical Advisors Group - Lotag (Which Covers All London Authorities And Tfl) 1.2 Partner Organisations Involved In The Submission Of This Bid

Lead London Boroughs 
- Lambeth - Hammersmith and Fulham - Newham 
-  Enfield 
Transport for London London Contracts and Supplies Group (LCSG) London Councils Office of Government Commerce Capital Ambition Associate Partner - London Fire Brigade  

## Note: Please List The Partner Organisations That Are Involved In The Submission Of This Bid (I.E. Joint Proposers).  Organisations That Are Directly Involved In The Delivery Of The Project Should Be Listed Separately

in Section 2) 

## 1.3 Project Aim (Maximum 30 Words) To Make Cashable And Non Cashable Savings In Respect Of The £350 Million Currently Spent On Maintaining The Highway Network In London

Note: The aim of the project should clearly state the changes you hope to achieve as a result of your work.  
Example To improve the opportunities of people in London who are long term homeless. 

## The Pan London Highway Project Objectives Are To:

- provide by 2013 a common specification and sub 
regional contracts across London for use by the London Boroughs and TfL 
1.4 Project Objective(s)  
 
Objectives should be measurable and outline the activities you will undertake and the services you will offer to deliver the aim.  Each objective should be a one sentence statement, or a number of statements starting with the word 'to' 

- provide savings from the use of common 
specifications and contracts in respect of highway maintenance activities 
- make savings in contract procurement by 
significantly reducing the number of contracts for highway maintenance activities across London 
- subsequently make savings from the reduced 
amount of contract management required 
- identify and make savings from existing contracts 
through the use of Supplier Relationship Development 
- make savings from the use of e-auctions for the 
provision of highway services i.e. electrical testing and inspection, and the supply of materials 
Example 
Staying with the example aim in 1.4 the objectives could be: 
- 
To provide training on core job skills and job search skills to xx 
number of people by January 2011  
- 
To offer supported work placements to xx number of people by 
Feb 2011  
If yes, please provide a brief explanation about the work previously delivered and the costs.   Please include the project reference number (URN), project dates, outputs, outcomes and funding awarded by Capital Ambition.   

## 1.5 Is This Bid For Funding Linked To A Previous Bid Or For Work Delivered In An Earlier Phase?

Note:  You can include information as an appendix if necessary. 

Yes - this is linked in with two earlier bids. The first was 
for the feasibility study in September 2009 and the 
second via the Supplier Relationship Development 
project in April 2010. The later was in relation to F M 
Conway and Volker. 

## 1.6 Business And Policy Context

Note: Describe the circumstances relevant to the project and provide a brief assessment of how the business needs are currently being met or not met.  Briefly outline how this project will bridge the gap between the current situation and the stated objectives, setting out why the project is needed and what it will do to meet that need. 

In order to manage and maintain London's Highway 
network there are currently circa 100 contracts with an 
annual value of £350 million ranging in value from £40k 
to £33million/ annum, with identified annual costs of 
preparation of £1.2million and subsequent costs of 
management and supervision in the order of £20 million. 
In addition to which there are significant variations in 
costs for similar types of activities. 

The project will look to rationalise the number of contracts, reduce the costs of preparation and management and move to fewer more standardised contracts, which will reduce the variations in costs and reduce the overall cost of this sector of activity within London.  

 
1.7 Funding Requested  
Total Project 
Cost (£) 
Total cost plus the amount of funding requested from Capital Ambition. Further details will be needed in Section 3. 


E-Auction SRD 
£    40,000 £    69,000            
| Amount of             | Amount of    | Total     |
|-----------------------|--------------|-----------|
| REVENUE               | CAPITAL      | Funding   |
| Funding               | Funding      | Requested |
| Requested from        | Requested    |           |
| CA (£)                | from CA (£)  |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
| Note:                 |              |           |
| Revenue               |              |           |
| expenditure includes  |              |           |
| staff salaries, rent, |              |           |
| heating, light,       |              |           |
| maintenance,          |              |           |
| marketing, and        |              |           |
| publicity,            |              |           |
| professional and      |              |           |
| legal fees.           |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
| Note:                 |              |           |
| Capital               |              |           |
| expenditure           |              |           |
| includes building     |              |           |
| and                   |              |           |
| refurbishments        |              |           |
| works, plant and      |              |           |
| equipment,            |              |           |
| purchase of land,     |              |           |
| fixtures and          |              |           |
| fittings and          |              |           |
| professional fees     |              |           |
| associated with       |              |           |
| capital               |              |           |
| expenditure           |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
|                       |              |           |
| £  39,000             |              |           |
£  319,000 £  392,000 £    15,000 £    50,000 £    70,000 £  120,000 £   (30,910) £1,075,000           
Specification development Contract Preparation & Writing Lean Construction Consultant 
Tender Stage (incl. PQQ, ITT, Review, Award) Programme Management Other Existing Capital Ambition (unallocated funding) Total 
 
1.8 Summary of Benefits by Type Please tick one or more types of benefit that your project will deliver.  You will have 
the opportunity to expand on this in 
Section 2.6. 
Cash Savings 
yes 
£12m/year 2013 to 
£22m/year 2020 
Efficiency Gains - contract savings 
yes 
£0.66m 2013 rising to     
£2.62m 2020 
Cost Avoidance - contract preparation 
 
 
Capacity Building 
 
 
Performance Improvement 
 
 
Customer Satisfaction 
 
 
Other 
£266,000 
                                
£(30,910) 
 
£ 274,090 
£274,090 
Tick as Appropriate
Please state/quantify the benefit for each 'tick'. Further detail will be 
required in Section 2.6. 

## 2. Project Detail 2.1 How Does The Proposed Project Address One Or (Or More) Of Capital Ambition'S Themes And Funding Priorities?

Note:  Please describe how your proposal addresses one (or more) of the Capital Ambition themes (Connected London, Delivering Together, Raising the Bar and Developing Capability) as well as priorities set out in CSR 2007, Local Area Agreements, National Indicator 179 and National Improvement and Efficiency Strategy themes of innovation, Empowerment, Economic Renewal and Value for Money. You should also demonstrate how learning, products and outcomes have relevance and value beyond those authorities/organisations directly involved in the project and identify areas where there are opportunities for skills and capacity building.   

Addressing Themes Reduction in the number of contracts from circa 100 to around 4/5 across the whole of the London highway network will address most if not all of the above themes 
by: 
- Greater alignment of approach - Simplifying range of contract types to help 
improve tendering and delivery of efficiencies by the supply chain and adoption of common systems 
- Development and universal adoption of common 
standards, specifications and model contract documents 
- Reduced tendering costs - Better management of the supply chain 
- Encouraging 
greater 
highway 
collaboration 
particularly between adjacent authorities 
- Developing a consistent approach to efficiency 
and performance management 
- Coordination of roadwork's - Improved response to incidents - Joint forward planning - Smoothing of the traffic flow - Improved strategic risk management of road 
network 
- Pan London E-Auctions for the supply of Services 
and goods 
- Contract efficiency savings - Contract preparation savings - Contract management savings Wider Learning, Products and Outcomes 
Contact has already been made with all other RIEP's 
nationally in respect of the work being undertaken with e-auctions and standard specifications. With positive responses already from the NE, SE, EM, WM and Y&H. 
London is also an active member of NIEP Highways 
Collaborative Group. The project will promote to, and work closely with, individual/groups of Authorities interested in pursuing collaborative working particularly in the Home County Authorities. In addition to working closely with Government 
Departments such as OGC and DfT we will also develop 
good practice guidance in conjunction with professional bodies such as the Technical Advisors Group TAG and the Association of Directors of Environment, Economy and Transport ADEPT. All presentations and information sheets/packs will be made freely available to local authorities and the like together with standardised contract documents and specifications. 
See also 'Communication Plan' attached 
 

 

## 2.2 Who Are The Partners Directly Involved In Running The Project And What Will They Contribute To Its Success?

 Please List partners: 
How will they contribute to the success of this project? 
OGC 
e-auctions for services and supply of materials pan London 
TfL and London Boroughs 
Standard specifications and contracts pan London 
London Contracts and Supplies Group 
Collaborative contracts pre 2013 
London Fire Brigade 
Supplier Relationship Development with current 2 largest suppliers of highway maintenance services in London 
Capital Ambition 
Highways Systems Survey 

## 2.3 What Are The Intended Outcomes Of This Project?

When considering intended outcomes, you need to ask the question 'What changes or effects should come about as a result of the project?'.  Outcome statements typically start with words such as improved, increased, enhanced and reduced.  

| Outcome No.                                                         |
|---------------------------------------------------------------------|
| 1                                                                   |
| Reduced  costs of highway maintenance activities through  a         |
| significantly reduced number of contracts through the award of  a   |
| standardised contract and specification                             |
| 2                                                                   |
| Reduced cost of contract preparation through a 95% reduction in the |
| number of contracts                                                 |
| 3                                                                   |
| Reduced contract management                                         |
| 4                                                                   |
| Reduced costs in current contracts through the use of Supplier      |
| Relationship Development                                            |
|                                                                     |
|                                                                     |
|                                                                     |
| 5                                                                   |
| Reduced costs in the procurement of Services and Materials through  |
| e-auctions                                                          |
|                                                                     |

## 2.4 What Outputs Will The Project Deliver?

Outputs (sometimes called 'deliverables') are tangible things that are to be delivered by the 
project e.g. toolkit, procedure manual, training strategy. Project phases are typically initiation, planning, execution and closure No. 
Project Stage or Phase 
Description of Output 
Target Completion/De livery Date 
1 
 
Award of a standard contract 
and specification 
2 
 
Reduced cost of contract preparation 
April 2013 
Incl. in Output 1 
3 
 
Reduced cost of contract management 
April 2013 
Incl. in Output 1  
4 
 
Supplier Relationship 
Development 
April 2011 
£69,000 
5 
Phase 1 
e-auctions - services 
April 2011 
£20,000 
5 
Phase 2 
e-auctions - materials 
April 2012 
£20,000 

## 2.5 How Will Outputs Be Rolled Out Beyond Partners That Are Participating In The Project?

Please describe how each of the outputs described above will be circulated, marketed and implemented externally. 

## Output No.  Roll Out Strategy

1 
Through LoTAG meetings and website, London Councils(already 
presented twice to Chief Executives) and monthly newsletter within London; national bodies such as ADEPT and regional seminars and the NEIP outside of London. See also the attached Communication Plan 
2 
As above 
3 
As above 
4 
As above plus for London workshops and negotiation groups 
5 
As 1 above 
 
 
Cost £ 
April 2013 
£966,000 

## 2.6 What Benefits Are Sought From Running This Project?

We need to understand what benefits are sought by running this project.  You should complete the table below and be specific in terms cash savings (what, how much over what period?), efficiency gains (how, impact?), Cost avoidance (what, how much over what period?) and Capacity Building.  The headings shown below are not exhaustive and addition headings can be added where necessary. 

 Benefit Heading 
Description (what benefits?, how much?, over what period?, 
impact?) 
Cash Savings*  
E-Auctions - Difficult to quantify but around 10% of contract cost. Pre 2013 collaborative work and Supplier Relationship Development - Difficult to quantify. £12.03m 2013 rising to £22.18m 2020 per year. This is the total possible cash saving assuming all Boroughs join the pan London Contracts on expiry of their own contracts. After 2021 the ongoing cash saving could be 
£33m/ year. See the attached 'PID Cashable Saving Model'. 
The above is achievable on the basis of a £1.07million investment over the next 3 years and an ongoing cost of £250k/ year from 2013 on for contract(s) management. 
 Based on the maximum possible saving i.e. 15% and 100% take up gives a benefit cost ratio in excess of 40:1. Taking a more cautious approach based on a 5% saving 
and assuming only a 50% Borough take up gives a 
benefit cost ratio of just under 10:1. 
Efficiency Gains 
£0.66m 2013 rising to £2.62m 2020 cumulative*. This is total possible efficiency gain assuming all Boroughs join the pan London contracts on expiry of their own contracts . After 2021 the ongoing efficiency gain could be £1.2 million per annum. 
*Based on £73,000 average cost per contract 
Cost Avoidance 
 
Capacity Building 
 
Performance Improvement 
 
Customer Satisfaction 
 
Other 
 

*We require clear information about projected return on investment for projects that claim to deliver efficiency savings.  Please use mietool (or a robust equivalent) to support your savings estimates, and provide the supporting documentation.  If you do not have any mietool trained staff, please see the following website for further details. 

http://www.londoncouncils.gov.uk/capitalambition/resourcesandperformance/bpcasestudies
/mietool.htm 

## 2.7 What Is The Equalities Impact Of This Project?

Note: Please carry out a relevance assessment before submitting this proposal and describe what steps you have taken to assess the equalities impact.  Any adverse impacts identified should be outlined in the proposal along with mitigating actions. 

One particular area of concern is the possible impact on SME's. 

To address this concern work will be undertaken to 
help develop consortia to provide the capacity and 
financial and financial strength to enable them to 
tender for the work. The contracts will also be based 
on sub regions with the ability for suppliers to bid for 
one or more. 

## 2.8 Legacy Planning - What Is The Legacy Of This Project?

Note: Please explain how the work undertaken during the running of this project will continue to deliver benefits after project closure. How will outputs be 'owned', maintained or updated after project closure? Please provide details on how the project outcomes will be sustained. 

Please describe how will the work undertaken during the running of this project will be sustained or carried on once the project has been completed.   
 

A standard set of contract documentation and 
specifications will be available together with a fewer 
number of pan London contracts that will be available 
for use by the London authorities. To ensure ongoing 
savings can be achieved and subsequently enhanced 
'lean construction'* will be a feature of the development 
of the contract documentation and performance 
contract methodology used with regard to its continued 
emphasis. As each Borough will enter into a separate 
contract with the pan London Supplier for that sub 
region there will be opportunity for both individual and 
collective ownership across the sub region and the 
London Region 

Supplier Relationship Development will not only look to 
gain efficiencies from existing contracts but the 
outcomes will also be used to develop the new pan 
London contracts. Once experience has been gained of the use of e-
auctions and the benefits that can accrue from them 
there will be a greater desire to look at other areas 
within Highways for their use.  

*lean construction - is about designing and operating the right processes and 
systems, resources and measures to deliver things right first time and eliminate 
waste. 

## 3. Project Resourcing

 
3.1 Have you secured or are you seeking match funding for this project?   Yes/No If yes, please complete details of match funders in the table below: 
Funder 
Amount (£) 
Is Funding Secured? 
Decision Date (if not 
TfL 
700,000 
Yes 
 
OGC 
40,000(in kind) 
Yes 
 
Capital Ambition - Highways SRD 30,000 
Yes 
 
Capital Ambition - Existing Approval 
30,910 
Yes 
 
 
3.2  What is the anticipated CAPITAL spend profile of funding requested from Capital Ambition? 
Year 
Quarter 1 (£) 
Quarter 2 (£) 
Quarter 3 (£) 
Quarter 4 (£) 
Total (£) 
1 


2 


Total 


3.3  What is the anticipated REVENUE spend profile of funding requested from Capital Ambition? 
Year 
Quarter 1 (£) 
Quarter 2 (£) 
Quarter 3 (£) 
Quarter 4 (£) 
Total (£) 
1 
 
 
140,000 
134,090 
274,090 
2 


Total 


secured) 

## 3.4 Project Staffing The Following Staffing Will Be Deployed:

 
1 x Programme Manager       -  now till April 2013 
(Consultant) 
3 x Specification Developers-  August 2010 - July 2011 (Agency) 3 x Contract Development     - January 2011 - March 2012(Agency) 1 x Project Manager SRD       - July 2010 - April 2011 
Analyst  - Supplier Intelligence Reports and research 
by end of 2010 Consultant  - Lean Construction and Performance Contract Outline and Guidance - August/ September 2010 
Note: Please describe what human resources, internal, external, consultants and/or working groups will be required for the project (please do not include staff that are classed as in kind contributions as they will be covered in section 3.3 below). 

 

## 3.5 In Kind Contributions

OGC - E-Auctions:  Project Manager and construction quantity surveyor circa £40k 

TfL - 3 x Technical Officers (part time up to April 2013) 
and use of meeting rooms. London Fire Brigade - 1 x Project Sponsor (part time up to April 2011) London Contracts and Supplies Group - East London 
Solutions - various officers to develop collaborative contracts pre 2013 

Note:  Please outline 'in kind' contributions of the partners described in section 2.2 and any other organisations involved.  These can include the provision of equipment, office space, meeting rooms, staff or contribution in other ways.  

 

## 4. Project Planning

None 
 

## 4.1 What Project Dependencies Were Identified During The Planning Stage?

 
 
Is this project on any other project or if any other projects are dependent on this 
project.  If so, how? 

## 4.2 What Key Assumptions Were Made During The Planning Stage?

Budgets and staff will be available when needed i.e. there will be phased employment of the Specification and Contracts Staff. Staff will only be employed for a maximum period of 12 months 
 

In order to achieve the benefits outlined there needs to be a willingness to pursue full collaborative procurement by partners requiring: 

- Cooperation - Trust - Openness - Shared standards and objectives - Use of Common Specifications 

Partners will be requested to sign up to a Charter to this effect. 

Note:  Examples of assumptions might be "Budgets and resources will be available when needed," or "new staff will have been employed by the time the implementation phase begins." 

## 4.3 What Constraints Were Identified During The Planning Stage?

Earliest start date of new pan London Contracts 
need to be timed with the TfL Contract earliest 
expiry of April 2013 to ensure a critical mass for 
the Contracts. 

The sub regional contracts would not be 
Framework contracts due too the restriction of 4 
years which is considered to be too short a period 
for works of this nature ( current average contract 
length is over 6 years) 

## Buy In By Authorities To Pan London Contracts And The Use Of Common Specifications.

 
Describe key constraints identified during the planning phase.  
Constraints typically include the availability of resources e.g. 
- 
amount of money/staff/equipment available and/or time  
- 
an immoveable deadline such as the start date of the 
2012 Olympics. 

## Development And Award Of Sub Regional Pan London Contracts For The Provision Of Highway Maintenance Reactive, Cyclic, Planned, Minor And Emergency Works. 4.4 What Is In The Scope Of This Project And What Specific Exclusions Have Been Identified?

The scope defines what is within the boundaries of the project and what is outside those boundaries, particularly where there may be areas of doubt.  

It does not include for network and asset 
management, nor with the exception of the e-
auction project for the provision of services such 
as: 

 
Consultancy for Professional Services and 
Management Services 
Note:  An example could be the introduction of HR shared services which will rationalise Recruitment, Staff Procedures, Terms and Conditions of Employment and Payroll but NOT 
Organisational Development. Clearly, for the avoidance of doubt, it would be appropriate to explicitly state that Organisational Development would not be included in the project.  

## 4.5 Key Risks

Please use the table below to outline the key risks identified during the planning process. Key risks should be identified and graded according to likelihood of occurring (Probability - High(H) /Medium (M) or Low (L) and seriousness (Impact - High, Medium or Low).  You should also define how risks will be minimised (Mitigating Actions).   

Risk No. 
Risk Description 
Probability (L/M/H) 
Impact (L/M/H) 
1 
Obtaining 
agreement to standard specification and conditions on 
contract 
 
H 
M 
Early discussions to 
map out scope. Questionnaires have been sent out. Supplier relationship development (SRD), with outputs expected March '11. Joint resources, specification and contract. London Head of Procurement group are part of the 
programme.  
2 
Economic changes 
and impact of Local Government finances. 
M 
H 
Monitor changes and 
review programme accordingly. Supplier development 
relationship 
3 
Lack of buy-in from 
partners 
H 
M 
Workshops and 
meetings with practitioners, senior management and chief executives. Seek commitment from chief executives. Effective communications plans. Seek political buy-in. London Head of Procurement group are part of the programme. Newsletter to be uploaded 
electronically (LoTAG)  
| Mitigating Actions    |
|-----------------------|
| Officer               |
| Project               |
| Manager               |
|                       |
| Project Board         |
|                       |
| Project Board         |
| 4                      | Legal challenge from    |
|------------------------|-------------------------|
| suppliers              |                         |
|                        |                         |
|                        |                         |
| M                      | M                       |
| meetings with          |                         |
| practitioners, senior  |                         |
| management and         |                         |
| chief executives.      |                         |
| Seek commitment        |                         |
| from chief executives. |                         |
| Effective              |                         |
| communications         |                         |
| plans.                 |                         |
| Seek political buy-in. |                         |
| London Head of         |                         |
| Procurement group      |                         |
| are part of the        |                         |
| programme.             |                         |
| Newsletter to be       |                         |
| uploaded               |                         |
| electronically (LoTAG) |                         |
|                        |                         |

## 4.6 Project Key Milestones

Please indicate key milestones for the project in the table below: No. 
Project Stage or Phase 
Key Milestone 
Target Completion/Delivery Date 
1 
Supplier 
Relationship Development 
Completion of negotiations with key 2 suppliers of Highway Maintenance activities 
2 
E-Auctions 
Electrical Inspection and 
Testing 
May 2011 
Zerrin Lovett 
3 
E-Auctions 
Supply of Materials 
May 2012 
Zerrin Lovett 
4 
Collaborative 
Contracts 
Common Specification 
August 2011 
Chris Tunstall 
5 
Collaborative 
Contracts 
Contract Documentation 
March 2012 
Chris Tunstall 
6 
Collaborative 
Contracts 
Award 
January 2013 
Chris Tunstall 
7 
Pre 
Collaborative Contracts 
Development and award of pre collaborative contracts prior to 2013 

## Please Attach A Project Gantt Chart That Clearly Shows Activities And Milestones Throughout All Phases Of The Project.

 
Project Manager 
 
Responsible Office 
May 2011 
Christine Morton/ 
Philip Snowling (Project Manager) 
Prior to April 2013 
Chris Tunstall/ East 
London Solutions 

 

## 5. Project Controls 5.1 Project Governance

Please provide a diagram showing the proposed governance structure if approved.  There should be the minimum of a Project Sponsor, Project Board and Project Manager. 

See attached 'Project Governance' diagram. 

## 5.2 Project Board Controls

Steering Group Meeting. Frequency - 3 monthly chaired by the Capital Ambition Programme Sponsor Programme Board Meeting. Frequency - meets 6 
weekly, chaired by the Programme Director 
Describe how the Project board will exercise its control over the project, 
referring to the project governance 
diagram as appropriate. 
Informal Checkpoint Meetings - Informal checkpoint 
meetings will be carried out bi weekly between the 
Programme Manager and Programme Director. Meetings will also be held at least monthly between the Programme Manager and the individual strand project leads. Highlight Reporting - The Programme Manager will as a 
minimum give a monthly report to the Programme Board from which an Action Sheet will be prepared and distributed to all Project Board Members. A monthly newsletter will also be distributed to all Authorities and Stakeholders. Escalation - In the event of a problem arising, the first stage for resolution will be the responsibility of the Programme Manager. If the problem is not resolved at that stage in a timely manner it will be escalated to the Programme Director. Escalations past the Programme Director are the Programme Board and ultimately the Steering Group. 
5.3 Day-to-Day Controls 
The individual Project Managers will be responsible to the Programme Manager for the day to day control of 
their projects 
Describe how the Project Manager 
will control the day-to-day running of 
the project.   
The Programme Manager will be responsible to the 
Programme Board for ensuring the delivery of the overall Programme. A change control procedure will be adopted in accordance with the change control pro forma provided in Capital Ambitions Project Management Pack. 

Note: Include any formal meetings (e.g. team progress meetings) as 
well as the informal decision making processes. 

 
5.4 Monitoring Procedures 
Each of the Individual projects will have their own 
project plan which will be monitored by the Project 
Manager for that Project.  
How will the project deliverables, costs and timescales will be tracked? 

## These Will Form Part Of The Overall Programme Master Plan Monitored By The Programme Manager And The Programme Board.

The accountable bodies for the financial controls of the projects will be: 

- Supplier Relationship Development - London Fire 
brigade 
- E-Auctions - OGC - Collaborative Contract - TfL 
The Programme Board will be responsible for the delivery of the overall Programme and for ensuring costs are retained within budget.  

## 5.5 Project Reporting

All Projects will commence with a Project Initiation Document. 
Describe what reports will be produced for monitoring and control 
purposes. 
Monthly highlight reports will be provided by each project manager to the Programme Board and a resultant action log produced for each Programme Board meeting. This will be copied to the Programme Sponsor. At key milestones an interim report will be provided for the Programme Board and Sponsor in order to agree commencement of the next stage of the project 
A Project Closure Report will be provided for each 
project and reported to the Programme Board and the Programme Sponsor for sign off. 

Note: State the purpose, frequency, who will produce them and who will receive them. As a minimum a monthly highlight report should be completed using the standard Capital Ambition Project Highlight Report template. 

## 5.6 Escalation Procedures If The Problem Cannot Be Resolved By The Programme Manager It Will Be Escalated To The Programme Director. Escalations Past The Programme Director Will Be The Programme Board. With Final Escalation To The Programme Sponsor And The Steering Group.

Describe the escalation procedures for dealing with deviations from plan, which exceed the authority of: 

a) the Project Manager b) the Project Board 

## 5.7 Risk And Issues Management A Full Risk And Issues Log Is Maintained With The Top 5 Risks Reviewed Monthly And The Full Log Quarterly. See Attached 'Risk And Issues Log'


Note: You should maintain a full risk and issues log which Capital Ambition can ask to see at any time during the lifecycle of the project. A template is available from the Capital Ambition Programme Management Office. 

## 5.8 Measures Of Success E- Auctions Looking For At Least A 10% Saving On The Overall Estimated **Value Of Work/Material.**

Please describe the measure(s) that will be used to indicate that the project has been successfully completed. 
Supplier Relationship Development - target to reduce cost base by a minimum of 5% working with 
contractors. 
 
Production and award of common Specification and Contract. 
Savings of at least 10% when procured through the pan 
London **contract.** 

Note: Each measure should be linked to one or more target outcomes. 

At the end of the project the measures will help answer such questions as 'what have we achieved?'. 

## 5.9 Communications Strategy

How you will be managing project communications throughout the 
lifecycle of the project? 
 
See attached 'Communications Plan' 
Note: You should describe what communications will take place, to 
whom i.e. Stakeholders.   Please attach an outline communications plan. 

## 5.10 Lesson Learned From The Monthly Highlight Reports, The Resultant Action Logs And Milestone Reports, A Lessons Learned Log Will Be Developed And Maintained And Incorporated Into The Final Project Closure Reports. All The Documents And Reports Will Be Available On The Website And Any Updates Drawn To All Partners Attention

 
Note:  Capital Ambition requires that you keep a lessons learned log to be shared with others who may run similar projects in the future. You will be asked to complete a project closure report including lessons learned, and may be asked to present your learning as the project develops. 

 

## 5.11 Partner Authorisation

Please indicate approval and acceptance of this proposal by the Project Board and Partner organisations participating in this project. 

 No. 
Organisation Represented 
Name 
Signature 
Date 
1 
TfL 
Dana Skelley 
 
 
2 
LoTAG 
Martin Sachs 
 
 
3 
OGC 
Zerrin Lovett 
 
 
4 
London Contracts and 
Supplies Group 
Dave Starling 
 
 
5 
London Fire Brigade 
Mark Atkinson 
 
 
6 
London Borough of Enfield 
Steven Skinner 
7 
London Borough of Lambeth 
Martin Sachs 
8 . 
London Borough of Hammersmith and Fulham 
Gordon Prangnell . 
9 
London Borough of Newham 
Paul Rogers 
 

Thank you for completing this proposal. We are happy to receive a copy by email to the Capital Ambition Programme Management Office - 
CA-PMO@londoncouncils.gov.uk Please sign and send hard copy to (and for further information): 


 Capital Ambition Programme Management Office Capital Ambition London Councils 59½ Southwark Street London SE1 0AL Signed……………………………………………………………………Date……………………………… Print Name             Chris Tunstall                        Position                    Programme Manager Before submission please ensure this proposal has the support of the Chief Executives of all joint-proposers, and where appropriate Elected Members. 

 

## Pid Cashable Savings

Contracts
saving
saving
saving 
TfL
borough
total cum
5%
10%
15%
2010
6
20.3
20.3
2011
16
54.1
74.4
2012
10
33.8
108.2
2013
9
100
20.3
120.3
6.01
12.03
18.05
2014
17
100
57.5
177.8
8.89
17.78
26.67
2015
1
100
3.4
181.2
9.06
18.12
27.18
2016
3
100
10.1
191.3
9.57
19.13
28.7
2017
6
100
20.3
211.6
10.58
21.16
31.74
2018
0
100
0
211.6
10.58
21.16
31.74
2019
1
3.4
215
10.75
21.5
32.25
2020
2
6.8
221.8
11.09
22.18
33.27
2021 new contract
100
230
330
16.5
33
49.5

 Contract Value and Saving £million/ year

## Key Activities And Milestones Pan London Collaborative Works Programme - Risk Register

Assessment of inherent Risk
Impact
No
Risk
Effect / Consequence
Category
Risk Owner
Likelihood
Likelihood
RAG
Impact 
Mitigation Measure
Gross Risk
1
Obtaining agreement to standard specification and conditions on contract
Reduced scope of programme therefore reduced efficiencies to be realised. 
R
Early discussions to map out scope. Questionnaires have been sent out. Supplier relationship development (SRD), with outputs expected 
March '11. Joint resources, specification and contract. 
Delivery Partners
5
4
20
London Head of Procurement group are part of the programme.
2
Economic changes and impact of Local Government finances. 
A change in global/national economics may result in contractor insolvency thus reduced competition for the contracts therefore reducing the efficiencies.
5
5
25
R
Monitor changes and review programme accordingly. Supplier development relationship
External Threats
3
Lack of buy-in from partners
Reduced scope of programme therefore reduced efficiencies to be realised. 
R
Workshops and meetings with practioners, senior management and chief executives. Seek commitment from chief executives. Effective communications plans. Seek political buy-in. London Head of Procurement group are part of the programme. 
Delivery Partners
5
5
25
Newsletter to be uploaded electronically (LoTAG)
R
Legal advice being sought. Supplier development relationship London Head of Procurement group are part of the programme. 
3
3
9
4
Legal challenge from suppliers
Delay to project, reduced scope and 
reduced efficiencies and possibly financial penalty
3
5
15
Legal
5
Key partner withdraws or is unable to provide resources to project completion. 
Suppliers may view withdrawal of key partner(s) as lack of confidence in project thus limiting their involvement and potentially resulting in reduced efficiencies. 
A
Alternative resources to be allocated. 
Strategy and 
Leadership
4
3
12
6
Supply Chain 
Management
Agreed ongoing level of service cannot be delivered and maintained during 
implementation
Without an agreed level of service, contractors may not be able to deliver the efficiencies that are expected. 
4
4
16
R
Early communication to identify risks. TUPE
4
2
8
7
Legislative changes and/or case law result in unexpected changes to programme scope or availability of workload. 
Legislative changes may deem the collaborative illegal and/or result in unexpected changes to the programme scope. A reduced scale of this project will result 
A
Monitor changes and review programme accordingly. Seek political buy-in. London Head of Procurement group are part of the programme. 
3
2
6
External Threats
5
2
10
in reduced efficiciencies.
8
Exclusion of SME's
The scale of the programme may filter some of the small and medium enterprises (SMEs) that may otherwise increase competition thus increasing efficiencies. 
R
Negoiation of Supply Chain Management workstream (SRD) Conditions of contract and PQQ. Development of SME consortia
3
2
6
Supply Chain 
Management
4
4
16
9
Not achieving lowest rates due to lack of volume
Savings not achieved. 
A
Seek commitment from chief executives Political buy-in (London Councils) Supplier development relationship. Effective communication
3
2
6
Delivery Partners
4
3
12
10
Losing existing buy-in
Showing lack of credibility in aims of 
programme. Suppliers do not enter dialogue/limited dialogue therefore savings not achieved. 
5
3
15
R
Good effective communications Full involvement of all partners No dominant partner
3
2
6
Delivery Partners
11
Critical staff resources cannot be procured when needed to fully 
develop the proposals and 
subsequently undertake the procurement and day-to-day management of the contract
Programme will not be met. As a result, efficiencies wil not be acheived and 
LBCs may not sign up. Also, without the 
new contracts available, LBCs may be forced to renew current contracts therefore reducing the scope of the pan 
R
Project planning and resource allocation to be finalised by project board. 
People & Skills
5
3
15
london collaborative.
12
Financial
Inaccuracy of savings to be made Reduced efficiencies to be made and 
could deteriorate relationships between 
A
To gain full involvement of LBCs to provide information. Revise savings upon further information being made available. 
5
1
5
partners. 
5
2
10
13
People & 
Skills/Financial
TUPE
Staff may leave any time as project develops, incurring loss of knowledge through to when new contracts are awarded. 
A
Effective communications plans. 
2
4
8
A
Effective early communication of requirements and constraints with various IT departments of partners and contractors 
2
2
4
14
Operations, 
facilities and 
systems
New systems do not interact satisfactorily with existing systems.
If (contract/database/costing) systems are not compatible, costs to rectify will result in reduced efficiencies. 
3
4
12
15
Supply Chain 
Management
Coordination/programming of works to contractors benefits. 
Contractors may program work to their benefit, running the risk of neglecting requirements/needs of the clients, i..e the LBCs
A
Programme board to be implemented
3
3
9
16
Supply Chain 
Management
Response times from contractor increases due to more remote locations
Contractors will not meet KPIs/SPIs
3
2
6
A
SRD
2
2
4
17
Strategy and 
Leadership
Project is more complex and overruns in time
Late delivery will reduce scope. Complex project will reduce buy-in from partners/ 
3
3
9
A
Effective project management Effective stakeholder engagement
18
Financial
Contract(s) will not generate savings
No savings will mean wasted expenditure on project to date. 
4
2
8
A
Fully developed business case with correct information from stakeholders and partners. External verification of recalibration of model. 
Assessment of Residual Risk
RAG
Comments
Action By 
Date
Mitigation 
in place?
Current Action & Status
Net Risk
A
Bid for funding for Cap Ambition has been submitted Attended sub-regional procurement boards.
Capital 
Ambition/
Project 
Manager
Funding for SRD has been confirmed. Visited 3/4 of sub-regional boards
4
3
12
12/07/2010
Yes
R
Commercial teams are monitoring Representative from procurement are on programme board. Savings will be reviewed when full impact of reduction in budget has been assessed. 
Project 
Board
Yes
3
5
15
A
Monthly on-going meetings. Chasing the LBCs who have not responded to questionnaire. Monthly newsletter. Attended sub-regional procurement boards.
On-going process throughout life of project. Visited 3/4 of sub-regional boards
Project 
Board
Yes
4
3
12
A
Representatives from procurements are on programme board. Legal advice to be sought. 
Capital 
Ambition/
Project 
Manager
Yes
A
Continual dialogue with key partners
Capital Ambition have shared concerns that resources may not be available from March 2011. TfL have offered to bridge funding gap for tasks related to Capital Ambition. 
Project 
Board
Yes
3
3
9
A
Communications plan distributed
Project 
Manager
Yes
Risk will be greater as implementation stage nears. 
A
Representatives from procurements are on programme board. This should negate need for legal advice. 
Project 
Manager
Yes
A
Supplier intelligence reports received. Capital Ambition are holding talks with suppliers. Development of SME Consortia to be considered further. 
Supplier intelligence reports will help inform scope of suppliers and determine the scope of contracts. PQQ will include conditions that will query how local resources and local knowledge is retained. 
Project 
Manager
Yes
A
Two meetings with chief executives taken place. Meeting with Directors Bid to Capital Ambition - being prepared. SRD stakeholder meetings - have taken place. Sub-regional presentations - 3/4 taken place. 
On-going process
Project 
Board/
Project 
Manager
Yes
LoTAG presentation - taken place
A
Monthly newsletter to be developed, with initial thoughts of uploading to LoTAG website. Comms plans to be distributed. 
Project 
Board
Yes
A
Project plan in place, resource allocation to be finalised
Project 
Board/
Project 
Manager
Project plan to be reviewed at project board meetings
5
1
5
Yes
A
Regular communication with LBCs to attain 100% return. 
Project 
Manager
Yes
PM to meet with LBCs to gain 100% return from questionnaires. 
G
Communications plan distributed
Project 
Manager
Yes
2
3
6
G
Ken Cole is reviewing current systems - done. Results to be reviewed and next steps 
agreed. 
Review has been completed. 
KCole
Yes
G
OGC to develop and implement programme board as per project plan. 
Project 
Manager
Yes
Programme board implemented from e-auction from of electrical services to be used as a pilot. 
2
2
4
G
Capital Ambition are holding talks with suppliers. This will be included on agenda. 
Capital 
Ambition
Yes
G
Project plan in place. SRD to determine scope from suppliers and partners. 
Capital 
Ambition/
Project 
Manager
Resource allocation has been finalised. 
Yes
Regular communication with LBCs to attain 
Project 
Manager
Yes
PM to meet with LBCs to gain 100% return from questionnaires. 

## Governance Arrrangements

Executive Steering Group Chair - CA Capital Ambition      
Programme Director         
Programme Manager           
LoTAG - Joint Chair            
Capital Ambition Nominee Programme Board Chair - Programme Director      
Programme Manager           
SRD Lead                    
OGC Lead                    
TfL Representative             
LoTAG Representative x 4       
TfL Procurement               
London Contract & Supplies Group London Society of Treasurers

Programme Manager
E-Auctions
SRD 
Pre 2013 Collaborative 
Collaborative 
Contracts
Contracts
Project Manager
OGC Project Manager
Project Manager
East London Solutions

## Pan London Collaborative Highway Works Marketing And Communications Strategy 2010/2013 Pan London Collaborative Highway Works Marketing And Communication Strategy 2010 - 2013 Strategic Marketing Communications Aims

- To raise awareness of the Pan London Collaborative Highway Works 
Programme throughout the Local Government Community in London. 
- To encourage Highways Partnership working throughout London - To ensure other key partners such as Capital Ambition, OGC, DfT, HELG 
Etc are kept fully informed of the progress of the programme 
- To communicate the programme nationally to other REIPs and local 
authorities 
- To ensure Key suppliers and supplier trade organisations are kept informed of 
the aims and objectives of the programme and its progress 

## Background

London Boroughs, the City of London and TfL between them spend over £400m per annum on highways related spend (excluding TfL's Capital works), £300m of which is works costs procured through a wide range of contracts based on geographic area, network type and activity. Recent work carried out through LoTAG by TfL, OGC, Capital Ambition and London Councils has demonstrated that opportunities exist for considerable savings to be realised by: 

- 
The coordination / aggregation of contracts 
- 
The consolidation of diverse specification 
- 
Common unit costs available to Boroughs and TfL 
Currently there are over 100 individual maintenance contracts being managed by the Boroughs, City of London and TfL with an annual spend ranging from between £40k to £30m. Contract preparation alone is estimated to cost London approximately 
£15m per 6 year period. It has been estimated that a Pan London umbrella contract divided into 5 sub-regional areas with common specifications would cost £750k to develop. Although across London, there are over 100 contracts, 5 contractors have over 50% 
of the contracts and 80% of the value and 2 contractors have over 50% of the Borough's work (in monetary terms). One contractor has contracts in at least 13 Boroughs. The range of unit prices, even from the same contractor, for similar activities is considerable, reasons for this are considered to be due to differing specification requirements from individual Boroughs, the quantity of work and the ability of the Boroughs to provide the contractor with robust forward programmes. Supplier relationship development work, led by Capital Ambition, is currently underway to investigate this further. The purchasing power of contractors which will allow lower unit rates is related to the quantity and commonality of the materials they need to procure. As part of the ongoing development of the collaborative contract, the OGC is to lead on an eauction process that will enable contractors to choose the most financially advantageous supplier for the procurement of materials. 

## Marketing And Communications Context

The Strategy concentrates on bringing together the various strands of the Programme to ensure its maximum potential is communicated to local authorities in order to maximise take up and potential savings. 

## Marketing And Communications Objectives

- 
To ensure the programmes key messages and objectives on a regular and 
programmed basis to ensure maximum impact 
- 
To ensure suppliers of highway works and their trade organisations are 
kept fully briefed as to the progress of the programme 
- 
To consult and engage local authorities, affected agencies and suppliers 
and their trade organisations in order to continually develop and monitor the effectiveness of the programme and the communications strategy 
- 
To raise the profile of the programme nationally 
- 
To ensure that all documentation and related publications are made 
available on the LoTAG shared website 
- 
To provide and promote positive publicity around the programme 

## Stakeholders And Partner Agencies Local Authorities

- 
Highway Managers 
- 
Directors responsible for Highway Service 
- 
Directors of Finance 
- 
Heads of Procurement 
- 
Chief Executives 
- 
Members 
- 
4 x sub regional procurement partnerships 
Other Agencies such as 

- 
Capital Ambition 
- 
OGC 
- 
DfT 
- 
Highways Agency 

## Other

- 
Key Suppliers of Highway Works 
- 
Supplier bodies such as htma 
- 
National REIPs 
- 
HELG 
- 
The media 

## Marketing Communications Tools

In order to achieve the marketing and communications objectives the following tools and methods will be used: 

- 
Events 
- 
Presentation  
- 
Briefings 
- 
Newsletter 
- 
Press and media 
- 
Printed information 
- 
LoTAG Shared info website 
- 
Research and best practice from other regions/ authorities 

## Communication Plan

- 
Newsletter 
A quarterly newsletter identifying progress and achievements to date will be 
produced and distributed to all Boroughs and Partner Agencies. 
- 
E-mail Bulletins 
Specific ad hoc e-mail bulletins will be circulated in respect of key issues arising from the programme and its various strands. 

- 
Briefing Papers  
Briefing papers will be produced and distributed on completion of specific milestones and on specific request. 

- 
Shared Website All documentation circulated will also be made available on the shared LoTAG Website. 

- 
Presentations Presentations will be prepared and delivered to interested groups or made available for deliver by others. 

- 
Publicity/ Marketing Publicity and Marketing material will be produced to raise the profile and awareness of the programme and its various strands. 

   

## Project/Subject: Collaborative Procurement For Passenger Carrier Transport

Rachel Clark, City of Westminster Report by: 
Email: rclark2@westminster.gov.uk  
Agenda item: 6 

## Strategic Theme:

 
Purpose:  To consider a request for funding of £237,875 over three years for the development and procurement in 2011 of a joint best practice and reduced cost and carbon emissions Passenger Carrier Transport service, that will align with the development of the London Council's pan-London Door-to-Door Strategy.  It is anticipated that the joint procurement will achieve cashable savings of at least 5% (£285k) in the first year and will increase significantly as other councils use the new contract. 

 

## Financial Implications 2010/11: Revenue Funding

Financial Year 
Committed/Spend In Year Total 
Balance 
 
New Funding Request 
Existing Project Approval 
2010/11 
0 


163,238 
163,238 
2011/12 
0 


69,637 
69,637 
2012-13 
0 


5,000* 
5,000* 
Total 

## Capital Funding

Financial Year 
Committed/Spend In Year Total 
Balance 
 
New Funding Request 
Existing 
Project Approval 
N/A 
N/A 
N/A 
N/A 
 
N/A 
N/A 
Total 


Revenue and Capital Total 
 
237,875 
 

 
* Legal estimate to cover other LAs joining the PCT arrangements included in total. 

| Total          | Existing    |
|----------------|-------------|
| Approval + New |             |
| Funding        |             |
| Request        |             |
| Total          | Existing    |
| Approval + New |             |
| Funding        |             |
| Request        |             |

Executive summary: The project will involve a joint scoping, specification development and procurement process for Passenger Carrier Transport Services which will allow efficiencies and subsequent cost and Carbon emission reductions. The key objective is to establish an arrangement that is procured under OJEU initially by Westminster City Council and the London Borough of Hammersmith and Fulham, and is accessible to all other London local authorities with initial interest expressed from RBKC who may join following expiry of their existing arrangements.  The benefits of doing so are to: 1. Share procurement effort and cost to reduce overall service costs and carbon emissions.

2. To enable further work as part of a pilot for the Transport Door-to-Door Strategy. It is recommended that In order to facilitate a procurement that would incentivise and enable further staged benefits for other Local Authorities to join, additional resources are required to enable this over and above existing resource commitments from WCC and LBHF. The key risks to this project are delays to the programme and the associated benefits realisation which is also mitigated by the additional resources to be recruited to support the project (subject to the CA funding approval). The Head of Mobility for London Councils has reviewed this proposal and submitted the following comment: "We support the funding of the City of Westminster/Hammersmith and Fulham joint procurement proposal because it seems to offer a learning opportunity given that large scale procurement has the potential to deliver economies of scale.  It is quite possible that the project could be one of a number of pilots that the London Councils' door-to-door project will need to inform its decisions.  This proposal appears consistent with the bigger vision we are trying to develop on door to door transport, but does not substitute for what we are doing" 

 
Risk: Delays to programme timing as a result of complexities arising from joint procurement and engagement process with RBKC other Local Authorities to include requirements. 

 
 
Recommendations: 
That the Board approves a request for funding of £237,875 over three years for the development and procurement in 2011 of a joint best practice and reduced cost and carbon emissions Passenger Carrier Transport service, initially for West London authorities but to be available to all London councils, that will align with the development of the London Council's pan-London Door-to-Door Strategy.   

 Appendices:  
Appendix A:  
Project initiation document 
Appendix B: 
Mietool output summary 
 
Background papers: 
- 
Expression of Interest  
- 
LBHF and WCC Joint Paper 
- 
WCC Cabinet Member Paper - Joint procurement with London Borough of Hammersmith and Fulham for the SEN transport Services 
# Collaborative Procurement: Passenger Transport Services And Vehicles

Lead Authority: 
Westminster City Council partnered with London Borough of Hammersmith & Fulham 
Project Sponsor: 
Cllr. Nicola Aiken (WCC) & Cllr Helen Binmore (LBHF) 
Project Manager: 
tbc pending BA bid approval 
Project Manager Contact Details:  
 
Author: 
Rachel Clark (WCC) & John Francis (LBHF) 
Date: 
28 June 2010 
Project Start date 
March 2010 
Project End Date  January 2012 

Please note: Capital Ambition does not support projects that benefit single authorities. Proposals should usually be joint submissions or be submitted by a lead partner on behalf of others. In exceptional circumstances Capital Ambition may support a bid but it must demonstrate specifically the value of outcomes and learning and how it can then be transferred to other organisations. 

## Template Revision History

|    | Version Created    | Reasons for/Summary of Changes                               | Author      |
|----|--------------------|--------------------------------------------------------------|-------------|
| 1  | 24/6/2010          | Joint draft developed - WCC & LBHF                           | RC/WS/JF/LG |
| 2  | 30/6/2010          | Consolidated comments LBHF & WCC                             | RC/JF/WS    |
| 3  | 30/6/2010          | Update on financial breakdown by quarter and resource timing | LG/RC       |
|    |                    |                                                              |             |

## 1. Project Overview 1.1 Title Collaborative Procurement: Passenger Transport Services And Vehicles

| 1.2 Project Summary   |
|-----------------------|
| (Maximum 100 words)   |
|                       |

A joint procurement between Westminster City and Hammersmith & Fulham Councils for passenger transport services for vulnerable residents; primarily, home to school transport for children with special educational needs and home to day centre transport for disabled adults. The successful contractor will source all vehicles needed to deliver these services in both boroughs.  It is intended that the contract will allow other authorities to join at a later date, should they wish to do so, via an access agreement thereby delivering further shared economies and efficiencies through discounted prices. 

 

Westminster City Council London Borough of Hammersmith & Fulham 

## 1.3 Partner Organisations Involved In The Submission Of This Bid

Royal Borough of Kensington & Chelsea West London Alliance 
To: 
 
1.4 Project Aim 
(Maximum 30 words) 
- 
improve vfm of transport service services to vulnerable 
residents; 
- 
maintain an important front-line service, during economic 
austerity; 
- 
deliver significant savings; 
- 
develop capacity for further collaborative procurement; 
- 
reduce carbon footprints. 
 

1.5 Project Objective(s) 
Objectives should be measurable and outline the activities you will undertake and the services you will offer to deliver the aim.  Each objective should be a one sentence statement, or a number of statements starting with the word 'to' 

 
- 
To award the contract in 2011 to a lead contractor at a reduced cost 
for both boroughs, which will allow neighbouring Councils to join and benefit from aggregated price discounts. 
- 
To start the service for 400 children from WCC and LBHF from the 
beginning of the autumn term 2011 
- 
To start the service for 120 adults from LBHF on 1 September 2011, 
and then look to migrate a further 162 adults from WCC when existing contracts expire. 
- 
To establish customer satisfaction baselines prior to contract, 
monitor and improve via annual survey post-contract from 
2011/2012. 
- 
To achieve cashable budget savings of at least 5% (c£285k) in year 
1 and further cashable savings in subsequent years as fuller integration is achieved. 
- 
To reduce unit costs of the service for both adults and childrens 
services. 
- 
To set up a joint client monitoring unit by 1 September 2011 to 
deliver further savings to both boroughs. 
- 
To identify and optimise opportunities for better sharing and 
rationalisation of assets, such as depots. 

- 
To have RBKC to join the contract in 2012-13, and other west 
London authorities when their existing contractual arrangements 
expire. 
- 
To identify and share lessons learned with all London Boroughs in 
the period January to March 2012, principally through a case study document. 
- 
To pump prime future collaborative arrangements between WCC, 
LBHF and other central and west London councils; for instance, through a progressive coalition of shared services across other 
functions. 
- 
To reduce year-on-year the number of total vehicle journeys across 
the two boroughs, and across others that subsequently join the contract, to reduce the carbon footprint and other adverse environmental impacts. 

## No 1.6 Is This Bid For Funding Linked To A Previous Bid Or For Work Delivered In An Earlier Phase? 1.7 Business And Policy Context

Passenger transport is an important front-line service to vulnerable groups of residents. There is a statutory obligation to ensure that pupils with statements of Special Education Needs, and certain groups of adults with difficulties are supported in gaining access to education and aspects of social care. LBHF has a council-wide market testing programme, of which passenger transport services is a part. LBHF's passenger transport services are currently delivered directly, in-house. As there will not be an in-house bid, the tendering will result in outsourcing, with a transfer of the service, its drivers and escorts to an external provider. LBHF want to award the new contract March-April 2011, giving the successful contractor sufficient time to mobilise their resources, source the specialist vehicles, and oversee the TUPE transfer, before commencing the contract in September 2011 at the start of the new school year. WCC wishes to procure these services jointly with LBHF. The provision of escorts and drivers for WCC's passenger transport has been outsourced for the some time, and is currently managed on their behalf under their Customer Services Initiative contract. Both Councils, along with others, are facing radical retrenchment. Both Councils want to maintain, and wherever possible improve, this important front-line service to vulnerable residents in the face of this retrenchment. Both Councils believe that the best way of achieving these objectives - of protecting front-line services whilst delivering savings - is to work collaboratively. Both Councils want to optimise the economic, social and environmental benefits of wider collaboration by leaving the door open for other councils to join at a later date - to deliver more for less. RBKC wish to have the option of joining this contract when their current arrangement expires. This will form an even more cohesive and economic bloc, and enhance the level of benefits resulting from the project. This is a pathfinder project. Despite Government promptings dating back to Gershon, the possibility of grant aid from Capital Ambition, and economic circumstances, very few front-line services have been procured jointly to date. The rewards of collaborative procurement are greater, but the journey can take longer and require careful navigation. WCC and LBHF recognise the importance of doing, and of sharing these lessons with others. 

1.8 Funding 
Requested  
Total Project 
Cost (£) 
Requested from 
£237,875, 
£ (existing resources as per 
Mietool) 
Total cost plus the amount of funding requested from Capital Ambition. Further details will be needed in Section 3. 
Tick as Appropriate 
1.9 Summary of Benefits by Type Please tick one or more types of benefit that your project will deliver. You will have the opportunity to expand further in section 2.6 
Cash Savings 
3 
Efficiency Gains 
3 
Cost Avoidance 
3 
Capacity Building 
3 
Performance Improvement 
3 
Customer Satisfaction 
3 
Other (Sustainability / Collaboration) 
3 
 
| Amount of    | Amount of    | Total     |
|--------------|--------------|-----------|
| REVENUE      | CAPITAL      | Funding   |
| Funding      | Funding      | Requested |
| Requested    |              |           |
| CA (£)       | from CA (£)  |           |
| £0           | £237,875     |           |
|              |              |           |
|              |              |           |

## 2. Project Detail

By working collaboratively, pooling budgets and purchasing power (and possibly assets such as depot facilities) the project will give effect to: 

## 2.1 How Does The Proposed Project Address One Or (Or More) Of Capital Ambition'S Themes And Funding Priorities?

- 
Delivering together, through joint procurement and development 
of a shared joined-up service and client-side organisation across Councils. 
- 
Developing capacity, by enhancing practical skills and 
experience of undertaking joint procurement within the two lead Boroughs, and then sharing this across London to help inform future collaborative exercises. 
- 
National Indicator 179, through on-going value for money and 
cash-releasable gains. 
- 
Capital Ambition's London Procurement Strategy, by coordinating purchases, combining contracts, sharing resources and by thinking and acting sub-regionally (with the support of the WLA). 
- 
Local Area Agreements on reducing carbon footprints.  
Aggregating demand should result in fewer overall journeys across boroughs, along with a reduction in other adverse environmental impacts. 

## 2.2 Who Are The Partners Directly Involved In Running The Project And What Will They Contribute To Its Success? Please List Partners: How Will They Contribute To The Success Of This Project?

London Borough of Hammersmith & 
Fulham 
Both are committed to delivering a successful joint procurement.  
Both partners are providing sponsorship, leadership and staff resources to work on the project. 
Westminster City Council Royal Borough of Kensington & Chelsea 
Has indicated a wish to be named on the OJEU giving them the 
option of joining the contract when their current arrangements expire, and are currently discussing with LBHF the potential for a future shared service. 
West London Alliance (WLA) 
Whilst a wider joint procurement of passenger transport services 
within the WLA is not possible at this time, due to existing contractual arrangements, it remains a long term objective of the WLA to travel in the direction of a shared solution.  The WLA - via it's Director, Ian Nichol - will play an important partnership role in promoting and facilitating take-up amongst WLA members of the option to joining the LBHF - Westminster contract, and in the aligning of this contract with any future wider WLA joint procurement which has potential to feed into the development of a regional transport hub. 

The Carbon Trust Has expressed support for the project through the current Low Carbon procurement pilot being undertaken with Westminster CC, 

given the project's potential to result in a lower carbon footprint via aggregated demand resulting in fewer overall journeys across boroughs. 


## 2.3 What Are The Intended Outcomes Of This Project?

When considering intended outcomes, you need to ask the question 'What changes or effects should come about as a result of the project?'.  Outcome statements typically start with words such as improved, increased, enhanced and reduced.  

| Outcome No.                                                                                | Outcome Description    |
|--------------------------------------------------------------------------------------------|------------------------|
| 1                                                                                          |                        |
| Reduced costs                                                                              |                        |
| by aggregating demand across boroughs, resulting in higher overall                         |                        |
| volume, lower numbers of vehicle journeys and cashable in-year savings, followed by        |                        |
| further savings resulting from more integrated and rationalised client-side arrangements.  |                        |
| The OJEU will allow other neighbouring Councils to access the contract. As and when they   |                        |
| join, the level of cashable savings (and price discounts) will increase.                   |                        |
| 2                                                                                          |                        |
| Increased flexibility and efficiency                                                       |                        |
| through better resource utilisation and deployment                                         |                        |
| within and between Westminster and Hammersmith & Fulham, and others sub-regionally         |                        |
| should they join when their current contractual obligations expire.                        |                        |
| 3                                                                                          |                        |
| Improved customer satisfaction                                                             |                        |
| through continuation of good quality services where                                        |                        |
| there is high level of dependency amongst vulnerable residents, their families and carers. |                        |
| 4                                                                                          |                        |
| Reduced environmental impacts                                                              |                        |
| with aggregated demand resulting in fewer vehicle                                          |                        |
| journeys, a reduction in emissions and other adverse impacts. A lower carbon footprint.    |                        |
| 5                                                                                          |                        |
| Increased collaborative working                                                            |                        |
| with this project being at the forefront of a wider                                        |                        |
| coalition of shared services between WCC, LBHF and RBKC.                                   |                        |
| 6                                                                                          |                        |
| Improved capacity for joint procurement                                                    |                        |
| within WCC and LBHF, learnt by doing, that                                                 |                        |
| can support future collaborative contracts.                                                |                        |
| 8                                                                                          |                        |
| Dissemination of lessons learnt                                                            |                        |
| via a case study that can be shared across London (and                                     |                        |
| inform London Council's Door-to-Door Transport Strategy) to drive efficiency, make         |                        |
| savings and improve services for users during a period of economic retrenchment.           |                        |
|                                                                                            |                        |

 

## 2.4 What Outputs Will The Project Deliver?

Outputs (sometimes called 'deliverables') are tangible things that are to be delivered by the project e.g. toolkit, procedure manual, training strategy. Project phases are typically initiation, planning, execution and closure 

| No.                                   | Project    |
|---------------------------------------|------------|
| Stage or                              |            |
| Phase                                 |            |
| Description of Output                 | Target     |
| Completion/De                         |            |
| livery Date                           |            |
| 1                                     | Initiation |
| documents in place                    |            |
| August 2010                           | 1-8        |
| 2                                     | Planning   |
| 3                                     | Planning   |
| 4                                     | Planning   |
| 5                                     | Planning   |
| Questionnaire (PQQ)                   |            |
| August 2010                           | 1-8        |
| 6                                     | Planning   |
| service agreed                        |            |
| September 2010                        | 1-8        |
| 6                                     | Planning   |
| documented                            |            |
| September 2010                        | 3          |
| 7                                     | Planning   |
| 8                                     | Execution  |
| bidders                               |            |
| December 2010                         | 1-7        |
| 9                                     | Execution  |
| completed and successful supplier     |            |
| informed                              |            |
| 2                                     | Execution  |
| agreed SLA's                          |            |
| From September                        |            |
| 2011                                  |            |
| 3                                     |            |
| 3                                     | Closure    |
| commences and service reports         |            |
| issues                                |            |
| 4                                     | Closure    |
| commences                             |            |
| From September                        |            |
| 2011                                  |            |
| 1                                     |            |
| 5                                     | Closure    |
| Authorities to facilitate adding them |            |
| to the agreement                      |            |
| 6                                     | Closure    |
| detailing impact of the new service   |            |
| on the carbon footprint               |            |
| 7                                     | Closure    |
| 2011                                  |            |
| 8                                     |            |
|                                       |            |
Which outcome is this output (s) linked to? 
December 2010 
1-7 
From September 2011 
1-8 
From September 2011 
5 
From September 2011 
4 

## 2.5 How Will Outputs Be Rolled Out Beyond Partners That Are Participating In The Project? Please Describe How Each Of The Outputs Described Above Will Be Circulated, Marketed And Implemented Externally.

Output No.  Roll out strategy 
1 
Critical lessons learnt, which have potential implications for other collaborative procurements 
across London, will be escalated to Capital Ambition as they arise for immediate dissemination within existing CA media. These will be highlighted in monthly project progress reports to CA. 
2 
Regular updates will be posted to the WLA for dissemination through existing sub-regional 
media. 

3. 
On project completion, a Case Study and Lessons Learnt report will be produced for dissemination via Capital Ambition, London Councils and any other relevant bodies concerned with promoting collaborative procurement and shared services. 

This will be supported by presentations to and Q&A sessions with CA and LC fora should CA wish.  

4. 
Following completion of the Case Study, WCC and LBHF are willing to host an Open Day for other Councils and public bodies, if the demand exists. 

5. 
Promotion of the project - its approach, outcomes, and Capital Ambition's role in supporting 
- in the local government, regional  and national press,   

6. 
Responding to on-going ad hoc requests for information on the project, supported by despatch of the case study. 

7 
Promotion of the project when relevant at other local government and/or procurement events, 
conferences, seminars etc. as the need/opportunity arises.  


## 2.6 What Benefits Are Sought From Running This Project?

We need to understand what benefits are sought by running this project.  You should complete the table below and be specific in terms cash savings (what, how much over what period?), efficiency gains (how, impact?), Cost avoidance (what, how much over what period?) and Capacity Building.  The headings shown below are not exhaustive and addition headings can be added where necessary. 

 Benefit Heading 
Description (what benefits?, how much?, over what period?, 
impact?) 
Cash Savings*  
As shown in Mietool. 
Efficiency Gains 
Single procurement costs for client and contractor compared to two 
procurement processes; vehicles used more efficiently across boroughs; single client-side management costs. 
Cost Avoidance 
Client and contractor both avoid duplication of procurement costs due to a single process and client (LBHF/WCC); also avoid duplication of client side costs. 
Capacity Building 
Staff knowledge and experience of collaborative procurement; able to rollout and use in future procurement of shared services. 
Performance Improvement 
Opportunity to develop methods to reduce journey times for vulnerable young people; to standardise eligibility criteria and performance standards across boroughs; and to align the project with the development of London Council's pan-London Door-to-Door strategy. 
Customer Satisfaction 
Maintain standards for vulnerable residents at a time of economic austerity, likely to be over the whole duration of the contract.  
Other 
A larger contract, with economies of scale that external providers enjoy, 
should offer a number of CPD opportunities for operational staff, including 
improved training and inward promotion. Economic and environmental benefits should accrue from more efficient journey sharing across boroughs for longer trips, including those to specialist schools outside London. 

*We require clear information about projected return on investment for projects that claim to deliver efficiency savings.  Please use mietool (or a robust equivalent) to support your savings estimates, and provide the supporting documentation.  If you do not have any mietool trained staff, please see the following website for further details. 

http://www.londoncouncils.gov.uk/capitalambition/resourcesandperformance/bpcasestudies
/mietool.htm 
 
A Predictive Equalities Impact Assessment has been carried out. 

## 2.7 What Is The Equalities Impact Of This Project?

Home-to-school transport for children with SEN and home-to-day centre transport for disabled adults are both statutory provisions, with high levels of dependency for the disabled children and adults who rely on it, their families and carers. Key stakeholders in this project include: 

- 
Young People with Special Education Needs, and their 
carers and families. 
- 
Adults with Mobility and Other difficulties, and their carers 
and families. 
- 
Schools that pupils with SEN attend - Special and 
mainstream schools. 
- 
Day centres that disabled adults attend. 
- 
Staff providing the service, many of whom are part-time employees. 

The primary purpose of the service is to enable access to education for children or young people with special education needs, and thereby improve their quality of life and empower them to reach a more independent adulthood.  
 
Similarly, the same service allows vulnerable elders access to regular day care provision. The latter will ensure they receive medical support, their nutritional needs are met and they have access to daily social interaction with their peers and others. A key aim of the project is to protect and enhance these aspects that support equality of opportunity to life chances; by working collaboratively across boroughs, pooling budgets, scarce resources and capacity to maintain this important front-line service and the difference it makes to peoples lives. 

 

## 2.8 Legacy Planning - What Is The Legacy Of This Project?

The key to ensuring that the contract delivers the anticipated benefits and required service will be the Supplier Relationship Management activity (SRM).  The key areas that the SRM will manage are  

- 
Regular meeting with supplier to review the MI detailing service 
performance 
- 
Benefits tracking reporting and cost management  
Please describe how will the work undertaken during the running of this project will be sustained or carried on once the project has been completed.   

- 
Issue/risk management  
- 
Tracking and reporting the environmental benefit 
- 
Innovation - including working with other councils to join up to 
the service 
- 
Supplier audit 
- 
Change management  
In addition to the SRM activity : To encourage and facilitate further collaboration an information pack will be made available to other councils containing key information, including but not limited to 

- 
Tender documentation and  information 
- 
Pricing information 
- 
Service information 

## 2.9 3. Project Resourcing

 
3.1 Have you secured or are you seeking match funding for this project?   Yes/No If yes, please complete details of match funders in the table below: 
Funder 
Amount (£) 
Is Funding Secured? 
Decision Date (if not 
None 


3.2  What is the anticipated CAPITAL spend profile of funding requested from Capital Ambition? 
Year 
Quarter 1 (£) 
Quarter 2 (£) 
Quarter 3 (£) 
Quarter 4 (£) 
Total (£) 
1 
0 
0
0
0 
0
2 
0 
0
0
0 
0
Total 
0 
0
0
0 
0
3.3 What is the anticipated REVENUE spend profile of funding requested from Capital Ambition? 
Year 
Quarter 1 (£) 
Quarter 2 (£) 
Quarter 3 (£) 
Quarter 4 (£) 
Total (£) 
1 
0 
33,925
64,656
64,656 
163,238
2 
39,012 
30,625
0
0 
69,637
Total 
39,012 
64,550
64,656
64,656 
232,875*

As per Mietool £5,000 in legal costs is set aside for subsequent local authorities to join the procurement arrangement. Needs to reconcile to 1.8 and Mietool? 

secured) 

## 3.4 Project Staffing

Resource will be fundamental to the success of this project.  Due to the collaborative and pathfinding nature it is going to be essential to have dedicated members of the project team to ensure each council's requirements are met throughout the project.  In order to develop a contract that supports the collaboration and allows for future expansion the Legal support required will be extensive. The financial support is requested for 3 roles, plus Legal support. 

## Project Manager 23/7/2010 To 30/9/2011 (1.2 Fte)

- 
Ensure that the correct Governance processes are followed 
within each council (each process being different)  
- 
Identify, track manage and resolve project issues  
- 
Produce all required project documentation and distribute to 
all stakeholders  
- 
Identify, manage and mitigate project risks 
- 
Ensure that the recommended solution is acceptable to all 
stakeholders within both councils  
- 
Manage the scope to ensure that only what has been agreed, 
is delivered, unless changes are approved through change management  
- 
Weekly reporting on project progress 
- 
Ensure work is assigned and completed on time and within 
budget  
- 
Produce and distribute lessons learnt documentation and case 
study. 

## Transport Procurement Specialist 1/10/2010 To 30/5/2011 (0.9 Fte)

- 
Advise on best practice 
- 
Act as subject matter expert  
- 
Inform and make recommendations following data collection 
- 
Produce options analysis and recommendations  
- 
Develop evaluation criteria for ITT  
- 
Lead evaluation of tender process 
- 
 Advise on and support the process of integration towards a 
fully shared service. 

## Data Analyst  23/7/2010 To 6/4/2011  (0.7 Fte)

- 
Identify data requirements 
- 
Gather data on current costs and processes across all 
potential councils that may join the end solution 
- 
Complete analysis on the data  
- 
Develop options analysis for different solutions and scope 
- 
Help to define acceptance criteria for completion of the 
solution  

 
Existing internal resources being committed by both Councils are: 
Rachel Clark, Procurement Manager - WCC Liza Gugliotti, Procurement Manager WCC (reducing over 1 month) 

Jacqueline Scott, Legal Services, LBHF 
John Francis, Procurement Officer, LBHF 

3.5 In kind contributions 
A high level sponsor and an executive level sponsor from each borough, Strategic Review Team with membership from each borough meeting regularly, including meeting room and travel), specialist 
expertise in respect of finance and HR. 

## 4. Project Planning

None. 
 

## 4.1 What Project Dependencies Were Identified During The Planning Stage?


## Is This Project On Any Other Project Or If Any Other Projects Are Dependent On This Project.  If So, How?

That: 

- 
Data that savings are based on is correct 

## 4.2 What Key Assumptions Were Made During The Planning Stage?

- 
A joint contract will enable the respective services to be 
delivered at less than current cost (c£6m).  
- 
The project has realistic and feasible timescales. 
- 
The statutory requirement to transport children with SEN and 
vulnerable adults will continue. 
- 
That children's SEN  volumes will remain constant, whilst the 
uncertainties surrounding the introduction of Self Directed Care for adults will require innovative solutions and engagement with the market. 
- 
The joint procurement is commercially viable. 
- 
There is market interest and capacity, already tested via 
provider events and dialogue. 
- 
Staff resources will be available when needed. 
- 
Legal issues and other (eg cultural or structural) barriers to 
collaboration will be overcome due to clear Leadership expectations on a successful outcome. 
- 
The external posts for which funding support is being sought 
(Project manager, transport procurement specialist and business support posts) can be filled by 1 October. 
- 
Financial resources are available to support the procurement. 

 

## 4.3 What Constraints Were Identified During The Planning Stage?

Requirement to start service for children with SEN at start of autumn term 2010, or need to move in half term chunks Financial support from Capital Ambition is available to support the additional resources required due to the pathfinder nature of the 
project. 
 
 
Initial scope: SEN Home to School Transport (WCC, LBHF), 
vulnerable adult transport to day centres (LBHF) Medium term scope: SEN Home to School Transport, vulnerable adult transport to day centres and taxicard scheme (WCC, LBHF) 

## 4.4 What Is In The Scope Of This Project And What Specific Exclusions Have Been Identified?

Ongoing exclusions for looked after children contact visits and home to school transport for looked after children with SEN. 

The scope defines what is within the boundaries of the project and what is outside those boundaries, particularly where there may be areas of doubt.  

## 4.5 Key Risks

Please use the table below to outline the key risks identified during the planning process. Key risks should be identified and graded according to likelihood of occurring (Probability - High(H) /Medium (M) or Low (L) and seriousness (Impact - High, Medium or Low).  You should also define how risks will be minimised (Mitigating Actions).   

Risk No. 
Risk Description 
Probability (L/M/H) 
Impact (L/M/H) 
M 
M 
Early discussion and 
early agreement on model 
2 
Delay due to difficulty 
between authorities in agreeing governance and project management model 
3 
Differences between 
partners on agreed objectives, eligibility 
policies, contract 
documents, use of 
assets and commercial imperatives 
M 
M 
Early and continuous 
discussion between partners, at all levels of both organisations, including the need to 
compromise where necessary to deliver the wider prize.  There will be joint production of all key documents to ensure full buy-in from both partners 
4 
One authority 
withdraws from the joint procurement 
L 
H 
This would be a major 
blow.  However, the presigned access agreement would allow other WLA authorities to join at a later date and thereby deliver colloborative benefits 
5 
Failure to elicit market 
interest 
L 
H 
LBHF have already 
placed a PIN and held a provider's event, with Westminster, RBKC and 
| Mitigating Actions    |
|-----------------------|
| Officer               |
| Rachel Clark          |
| Rachel Clark          |
| Project               |
| Sponsors WCC          |
| &LBHF                 |
| Project Team          |
| 6                         | Lack of stakeholder    |
|---------------------------|------------------------|
| buy-in; possibly          |                        |
| accompanied by            |                        |
| adverse media             |                        |
| publicity and / or        |                        |
| campaigning arising       |                        |
| from service users'       |                        |
| and family concerns at    |                        |
| the new contract          |                        |
| L                         | M                      |
| stakeholders, including   |                        |
| service users, their      |                        |
| families and carers,      |                        |
| schools, day centres,     |                        |
| representative            |                        |
| community                 |                        |
| organisations, staff and  |                        |
| trade unions -            |                        |
| supported by a clear      |                        |
| and on-going              |                        |
| communications            |                        |
| strategy                  |                        |
| 7                         | TUPE complications     |
| checking of TUPE          |                        |
| information.  Early       |                        |
| consideration and policy  |                        |
| resolution of any risks   |                        |
| and liabilities providers |                        |
| express concern at        |                        |
| accepting the transfer of |                        |
| M                         | H                      |
| by following the actions  |                        |
| described in points 5     |                        |
| and 7 above               |                        |
| 8                         | Poor vfm tenders       |
| (taking into account      |                        |
| quality and cost) being   |                        |
| returned at the end of    |                        |
| the competition           |                        |
|                           |                        |
WLA representatives present.  Following the event, several market 
players have expressed interest in a joint contract (a framework that could incrementally expand over time to include others).  Both partners are committed to further ongoing dialogue with the market on key issues prior to inviting tenders, 
including regular 
provider update bulletins, the last of which was posted 12 May 2010 
Project Manager 
WCC and LBHF HR 
Project Team 

## 4.6 Project Key Milestones

Please indicate key milestones for the project in the table below: 

| No.                                 | Project                 |
|-------------------------------------|-------------------------|
| Stage or                            |                         |
| Phase                               |                         |
| Key Milestone                       | Target                  |
| Completion/Delivery                 |                         |
| Date                                |                         |
| 1                                   | Initiation              |
| PID to Capital Ambition             |                         |
| June 2010                           | Liza Gugliotti / Rachel |
| Clark                               |                         |
| 2                                   | Initiation              |
| governance arrangements             |                         |
| established                         |                         |
| 3                                   | Initiation              |
| authorities joining the process     |                         |
| July 2010                           | Rachel Clark WCC /      |
| John Francis LBHF                   |                         |
| 4                                   | Planning                |
| John Francis LBHF                   |                         |
| 5                                   | Planning                |
| completed                           |                         |
| July 2010                           | Rachel Clark WCC /      |
| John Francis LBHF                   |                         |
| 6                                   | Planning                |
| John Francis LBHF                   |                         |
| 6                                   | Planning                |
| mechanisms between partners,        |                         |
| including possible discount         |                         |
| mechanisms should contract          |                         |
| expand                              |                         |
| 7                                   | Planning                |
| other authorities option of joining |                         |
| contract later                      |                         |
| 8                                   | Planning                |
| draft specification and pricing     |                         |
| proposals                           |                         |
| 9                                   | Execution               |
| commencement of formal              |                         |
| competitive tendering               |                         |
| 10                                  | Execution               |
| Short list of potential suppliers   |                         |
| agreed                              |                         |
| August 2010                         | tbc dependent on CA     |
| bid.                                |                         |
| 10                                  | Execution               |
| Invitations to tender issued.       |                         |
| October 2010                        | tbc dependent on CA     |
| bid.                                |                         |
| 11                                  | Execution               |
| Return and evaluation of tenders.   |                         |
| December 2010                       | tbc dependent on CA     |
| bid.                                |                         |
| 12                                  | Closure                 |
| LBHF and Westminster CC             |                         |
| Cabinets agree contract award.      |                         |
| March 2011                          | tbc dependent on CA     |
| bid.                                |                         |
| 13                                  | Closure                 |
| Contractor mobilises resources      |                         |
| and handles TUPE transfer.          |                         |
| Contract commences.                 |                         |
Responsible Office 
July 2010 
Rachel Clark WCC / 
John Francis LBHF 
august 2010 
Rachel Clark WCC / John Francis LBHF 
August 2010 
Rachel Clark WCC / John Francis LBHF 
August 2010 
tbc dependent on CA bid. 
August 2010 
tbc dependent on CA bid. 
April 2011 
tba 

Please attach a project GANTT chart that clearly shows activities and milestones throughout all phases of the project. 

## 5. Project Controls 5.1 Project Governance

Please provide a diagram showing the proposed governance structure if approved.  There should be the minimum of a Project Sponsor, Project Board and Project Manager. 

## Capital Ambition Efficiency Board Project Board

2 x Cabinet Members, 2 x Directors of Children's Services, Strategic Director of Resources (Project Sponsor), Head of Procurement 

## Project Team

Project Manager (TBC) Data Analyst (TBC) Procurement Manager  - Rachel Clark WCC Procurement Officer - John Francis LBHF Legal Support x2 (WCC and LBHF) HR x2 (WCC and LBHF) Finance x2 (WCC and LBHF) 
------------------------------------------------------- 

## Project Board Membership:

Alastair  Gilchrist, Strategic Director  of Resources  WCC - Project Sponsor Cllr. Nicola Aiken, Cabinet Member for Children's WCC Michael O'Connor, Director of Children's Services WCC David Loseby - Head of Procurement WCC Cllr. Helen Binmore, Cabinet Member for Children's Services LBHF Andrew Christie, Director of Children's Services LBHF Gill Sewell, Assistant Director of Children's Services LBHF  

## 5.2 Project Board Controls

Monthly headline report, including progress, issues and risks to Project Team (PT)  and Project Board (PB) 
PB to meet as a minimum 2 monthly and then monthly once OJEU issued to agree to move on following successful completion of each key milestone 
Describe how the Project board will 
exercise its control over the project, referring to the project governance 
diagram as appropriate. 
Project manager to act as link between PT and PB Tightly managed project plan 

## 5.3 Day-To-Day Controls

Daily calls with Project Team Weekly project meetings 
Describe how the Project Manager will control the day-to-day running of 
the project.   
Daily risk and issue management 
Completion of weekly project report 

## 5.4 Monitoring Procedures

Project Manager to track costs, benefits and deliverable and include within weekly project report, issues to Project Board and Capital 
Ambition 
How will the project deliverables, costs and timescales will be tracked? 5.5 Project Reporting 
Project manager to complete a weekly project report and a monthly Project Board.  With a RAG rating for each element. 
Describe what reports will be produced for monitoring and control 
purposes. 
Project Manager to complete monthly Capital ambition report. 
 

## 5.6 Escalation Procedures

 
Describe the escalation procedures for dealing with deviations from plan, 
which exceed the authority of: a) the Project Manager to Board 
b) the Project Board to SEB and Cabinet (WCC and LBHF) 
c) SEB and Cabinet to Capital Ambition Efficiency Board 
Noted - Project Manager will be responsible to developing and maintaining this 

## 5.7 Risk And Issues Management 5.8 Measures Of Success

Reduced costs:  WCC and LBHF are able to achieve and successfully 
track 10%+ cashable savings over the contract period. 
Increased efficiency: Reduction in vehicle numbers used for current 
volumes and reduction in staff hours required to monitor current arrangements 
Please describe the measure(s) that will be used to indicate that the project has been successfully completed. 
 
Customer satisfaction: survey results indicate no reduction in customer 
satisfaction 
Reduced environmental impact: Reduction in mileage per person 
Increased collaborative working: Robust contract for transport services 
used by WCC, LBHF and other authorities  from 1 September 2011 
Increased flexibility: WCC and LBHF able to source additional transport 
services via this framework contract as existing contracts end;  
Improved capacity for joint procurement: Further collaborative 
procurements for shared services between WCC and LBHF 

## 5.9 Communications Strategy

How you will be managing project communications throughout the 
lifecycle of the project? 
Project manager will develop a Stakeholder communication plan. 
Depending on the internal Stakeholder there will be weekly / monthly reports on issues. Communication may also take place in line with the escalation procedure. There will be also be consultation and communication throughout the project with external stakeholders - such as service users, parents and carers, special schools and adult day centres - as well affected employees in line with TUPE requirements. .  
Noted:  Risk and Issues log will be expanded to capture lessons learned. 

## 5.10 Lesson Learned

 

## 5.11 Partner Authorisation

Please indicate approval and acceptance of this proposal by the Project Board and Partner organisations participating in this project. 

 

| No.                     | Organisation Represented    | Name               |
|-------------------------|-----------------------------|--------------------|
| 1                       | Westminster City Council    | Cllr Nicola Aiken  |
| (Cabinet Member)        |                             |                    |
| 2                       | Westminster City Council    | Alastair Gilchrist |
| (Strategic Director of  |                             |                    |
| Resources) - Project    |                             |                    |
| Sponsor                 |                             |                    |
| 3                       | Westminster City Council    | Michael O'Connor   |
| (Director of Children's |                             |                    |
| Services)               |                             |                    |
| 2                       | LB Hammersmith & Fulham     | Cllr Helen Binmore |
| (Cabinet Member)        |                             |                    |
|                         |                             |                    |
| 3                       | LBHF                        | Andrew Christie    |
| (Director of Children's |                             |                    |
| Services)               |                             |                    |
| 5                       | RB Kensington & Chelsea     | Nicholas Holgate   |
| (Director of Finance)   |                             |                    |
| 6                       | West London Alliance        | Ian Nichol         |
| (Director)              |                             |                    |

Thank you for completing this proposal. We are happy to receive a copy by email to the Capital Ambition Programme Management Office - 
CA-PMO@londoncouncils.gov.uk Please sign and send hard copy to (and for further information): Capital Ambition Programme Management Office Capital Ambition London Councils 59½ Southwark Street London SE1 0AL Signed……………………………………………………………………Date……………………………… Print Name ………………………………………………Position…………………………………………. 

## Before Submission Please Ensure This Proposal Has The Support Of The Chief Executives Of All Joint-Proposers, And Where Appropriate Elected Members.

|     |     |
|-----|-----|
|     |     |
|     |     |
|     |     |
|     |     |
|     |     |
|     |     |
|     |     |
| Non-financial inputs   | Outputs           |
|------------------------|-------------------|
| Guidance               |                   |
| Introduction           | Financial inputs  |
| Staff spend            |                   |
| Summary                |                   |
| Community impacts      |                   |
| Organisational impacts | Depreciation      |
| Staff benefit          | About             |
| mie                    |                   |
| tool                   |                   |
| Project summary        | Non-staff spend   |
| Environmental impacts  |                   |
| Is this an efficiency? | Benefits tracking |
| Capital spend          |                   |
| Assumptions            |                   |

## Summary Results Project: Collaborative Procurement: Passenger Transport Services And Vehicles

| Financial impact (£000's)                                  | Strategic impact                 |
|------------------------------------------------------------|----------------------------------|
| Improvement                                                | Deterioration                    |
| Confidence in                                              |                                  |
| inputs                                                     |                                  |
| Medium                                                     |                                  |
| Low                                                        | High                             |
| Low                                                        | Medium                           |
| Setup costs (Costs of designing and                        |                                  |
| implementing the project)                                  |                                  |
| (248)                                                      |                                  |
| Stronger communities                                       |                                  |
| High                                                       |                                  |
| Safer communities                                          |                                  |
| Ongoing costs (Costs of delivering and                     |                                  |
| managing benefits)                                         |                                  |
| (5)                                                        |                                  |
| Children & Young People                                    |                                  |
| Cashable benefits                                          | 1,330                            |
| Medium                                                     |                                  |
| Adult health and wellbeing                                 |                                  |
| Exclusion and equality                                     |                                  |
| Local economy                                              |                                  |
| Payback over period of project                             |                                  |
| 1,077                                                      |                                  |
| Potential variation in payback                             | 22%                              |
| NPV                                                        |                                  |
| 950                                                        |                                  |
| Low                                                        |                                  |
| Environmental sustainability                               |                                  |
| Non-cashable impact on staff                               | (147)                            |
| -                                                          |                                  |
| Non-cashable impact on office space                        | -                                |
| Project risks                                              | Organisational (internal) impact |
|                                                            |                                  |
| Improvement                                                | Deterioration                    |
| You identified 15 project risks. The six most serious are: |                                  |
| Low                                                        | Medium                           |
| Overall Performance                                        |                                  |
| Risk                                                       | Likelihood                       |
| Human Resources                                            |                                  |
| Finance                                                    |                                  |
| Information Technology                                     |                                  |
| Procurement                                                |                                  |
| Property and FM                                            |                                  |
| Customer Services                                          |                                  |
| Not having the right commercial model                      | 3/5                              |
| Cost overrun on services                                   | 3/5                              |
| Delay to project timescales                                | 3/5                              |
| Not obtaining key information from other LAs               |                                  |
| 2/5                                                        | 5/5                              |
| Loss of key personnel                                      | 2/5                              |
| Political or policy changes                                | 2/5                              |

## Explanatory Notes Strategic Performance Indicators

| Indicator                                                                       |
|---------------------------------------------------------------------------------|
| Financial impacts - Confidence Level.                                           |
| The 'confidence in inputs' bar                                                  |
| shows the average confidence that the tool's user has in the financial          |
| inputs. A high degree of confidence indicates that the actual costs and         |
| benefits are unlikely to vary much from the forecast in this tool. Low          |
| confidence indicates that a larger variation is likely - possibly because       |
| unreliable data sources have been used.                                         |
| Financial impacts - Non-Cashable Impact.                                        |
| 'Non-cashable' impacts on                                                       |
| staff or accommodation represent the value of additional or reduced             |
| capacity that does not affect the organisation's budget. A positive number      |
| in the staff non-cashable impact, for example, indicates that the project       |
| will free up staff time but staff will not be redeployed, and will therefore be |
| able to provide a better service.                                               |
| Performance indicators                                                          |
| . The list on the right shows which performance                                 |
| indicators are relevant to this project. If more than ten are relevant, the ten |
| upon which the project has the greatest positive impact are listed.             |

Community (external) impact and Organisational (internal) impact. 

The summaries in the charts shown above are based on an assessment of the relevant performance indicators for each category shown in the charts.

Project risks. This section summarises the most serious risks that the project faces.

High
Project/Subject:  
Promoting 
the 
Consultancy 
and 
Professional 
Services 
Procurement project to London authorities 
Salli Reynolds, Project Manager 
Report by: 
Agenda item: 7 
Email: salli.reynolds@londoncouncils.gov.uk   

Strategic Theme: 
Delivering Together 
 
Purpose:  To receive the closure report for this project and consider the additional recommendations for the future direction of this work. 

 

## Financial Implications 2010/11: Revenue Funding

| Total           | Existing    |
|-----------------|-------------|
| Financial       |             |
| Year            |             |
| Committed/Spend |             |
| In Year Total   |             |
| Balance         |             |
| New Funding     |             |
| Request         |             |
| Existing        |             |
| Project         |             |
| Approval        |             |
| Approval + New  |             |
| Funding         |             |
| Request         |             |
| 2009/10         |             |
|                 |             |
| Total           |             |
| £35,000         | £19,248     |
|                 | 0           |
| £35,000         |             |
|                 |             |
| Total           |             |

 
There is an underspend of **£15,752** on this project which is available for/has already been carried forward to contribute to savings on the 2010/11 budget.  
 
 
Executive summary:  
This report describes the third phase of work to improve the procurement of, and reduce spend on, consultants.  Previous phases had developed and piloted the use of 5 main tools to support boroughs in getting value for money from consultancy use, and this phase sought to publicise these tools and encourage further take up.  The report shows that this has been achieved. 

 
The recommendations from the closure report are simply to close this phase of the project and ensure the website is kept up to date annually.  However, it is clear that this area of expenditure, along with agency staff, interims, and indeed permanent employees, is still of major significance in the current climate. Given the level of spend on consultants across London of some £300m p.a., it is proposed to consult on and develop a new proposal to address the costs and savings to be made from a more holistic approach to resourcing, coupled with better supplier and contract management, and the development of better data on both workforce requirements and spend in the broad temporary and professional services categories.  This will take account of the achievements of all stages of this project, including those led by Hounslow, the City of London and Islington, and the new Consultancy Value Programme work being led by OGC, which the other RIEPS are now actively promoting. 
 
 
Risk: There is some evidence from the closure report that boroughs find the use of consultants particularly hard to control, given the often devolved responsibility for their procurement.  It will therefore be important going forward to ensure that a focus on delivering real savings (on an estimated spend of approximately £300 million p.a. in this specific area) is maintained and promoted. 

 
Recommendation: 
That the Board: 
i) 
accepts the closure report from London Borough of Lambeth; 
ii) 
considers the recommendations in paragraph 3.2 of the report; and 
       iii)      notes that a further programme of work will be developed and submitted 
                 to a future meeting of the Board. 
 Appendices:  
Appendix A: Promoting the Consultancy and Professional Services Procurement project to London authorities, Closure report June 2010 
Background papers:  
Capital Ambition Professional Services Procurement Project - follow-up stakeholder survey analysis July 2009 Capital Ambition Professional Services Procurement Project - follow-up stakeholder survey analysis May 2010 Consultancy Communications Plan Consultancy Workshops Attendance list 
 

Promoting the Consultancy and Professional Services 
Procurement Project to London Authorities 
11 June 2010 Report by Esther Thomas 
 
1. 
Background  
 
The Consultancy and Professional Services Procurement Project was developed with London Centre of Excellence (LCE) funding to help authorities reduce spend and improve results from the purchase and use of consultants. Stage one of the project was carried out in 2005/06 and was led by City of London and LB Hounslow.  The second stage commenced in 2007 and was led by LB Islington.  This report relates to the third stage of the project led by LB Lambeth.  The focus of the third stage was to promote to London authorities the existing five products developed in the first two stages. 
 
1.1 
Stage one - led by City of London and LB Hounslow 
 
City of London and LB Hounslow led the first stage of the Consultancy and Professional Services Procurement Project carried out in 2005/06. The project 
sought to help London authorities reduce spend and improved results from the procurement and management of consultants. Three products were developed as follows: 
 
- Consultancy Commissioning Toolkit - Consultancy Knowledge Centre 
 
- Buying Consultancy Services Workshop 
 
1.2 
Stage two - led by LB Islington  
 
In 2007, LB Islington received LCE funding to lead a second separate stage of the project.  Stage two aimed to:  
 
- Pilot and review the Commissioning Toolkit; - Review and populate the Consultancy Knowledge Centre; - Pilot and review the Buying Consultancy Services Workshop; - Pilot an Internal Brokerage within LB Islington and other partner authorities; - Promote the products from the first phase of the project to London 
authorities. 
 
The project manager left in 2007 and was not replaced. No activity took place on the project until the third stage commenced in June 09 led by LB Lambeth. 
2. 
Promoting the Consultancy and Professional Services 
Procurement Project to London Authorities. 
 
2.1 
Project aims  
 
With funding of £35k from Capital Ambition, LB Lambeth commenced work in June 2009 to promote the 5 consultancy products to London authorities. The products are:  
 
- **The Consultancy Commissioning Toolkit** - practical guidance and 
resources to review the approach, the procurement process and the management and evaluation of commissioning consultants. 
 
- **A Guide to Buying Consultancy** - supplements the Consultancy 
Commissioning Toolkit and provides pragmatic guidance that helps to focus on and identify the results that need to be delivered. 
 
- **The Buying Consultancy Services Workshop** - training to develop the 
specific skills required to commission and manage successful consultancy assignments and achieve better results. 
 
- **The Consultancy Brokerage Model** - provides a central point within an 
authority for commissioning consultants and helps to address fragmented practices.   
 
- **The Consultancy Knowledge Centre** - provides local authorities with the 
capability to share information and data on completed consultancy assignments. 
 
The project aimed to: 
 
- increase awareness among London authorities of the products and services 
resulting from the first two stages of the project and the benefits to be gained; - promote and embed usage of the products and services within London 
authorities.  
 
- explore opportunities to share best practice and establish linkages to the 
work of other organisations where appropriate. 
 
2.2 
The project board 
 
The project board partners from stage two consisted of the London boroughs of Islington, Merton, Redbridge, Ealing and Lambeth. The intension had been to reform the project board to enable the current stage to benefit from existing 
knowledge and experience. However, attempts to reestablish the project board were unsuccessful, as the contacts within the partner boroughs had either moved on or, in the case of Ealing, had not responded to a number of contacts made by the project. As part of second stage of the project, the partner boroughs had agreed to pilot and review the Consultancy Knowledge Centre.  The findings of the review were to provide recommendations for the development of the Centre and help to embed usage among London authorities. On contacting the partners, it became apparent that, with the exception of LB Islington, none had trialled the Centre. As a result, expected review information was not available to support promotion of the Consultancy Knowledge Centre during the current stage.  
 
2.3 
Initial stakeholder survey to establish levels of awareness, understanding 
and usage of the products.  
 
An initial stakeholder survey was sent to all London boroughs and the GLA Group. The aim of the survey was to measure existing levels of awareness, understanding and usage of each of the 5 products by London authorities. The survey was targeted at Heads of Procurement and Directors of Finance. The fragmented nature of consultancy procurement would make it difficult for procurement teams to judge whether and to what extent their authority used the products. However, the survey would provide an insight into levels of awareness, understanding and usage within London authorities.  
 
2.4 
Overview of Survey Findings   
 
Twenty-one authorities responded to the survey, all of which were London boroughs with the great majority of responses coming from procurement teams.  A summary of responses is attached (Appendix 1).  
 
As expected, the survey results indicated that general levels of awareness and understanding of the products among boroughs was low, resulting in low levels 
of usage.  Some of the key points are below - it should be noted that not all respondents answered every question: 
 
- Twenty-one authorities responded to the survey, 13 of which confirmed that 
they were aware of the project prior to receiving the survey. However, 8 had not heard of the project prior to receiving the survey. - Only 8 authorities said that they had used one or more of the products. - The Consultancy Commissioning Toolkit and A Guide to Buying 
Consultancy had the highest usage.  The Brokerage Model, the Consultancy Knowledge Centre and the Buying Consultancy Services Workshop appeared to be less popular.  This was closely related to varying levels of understanding of the products. - No borough disagreed that all of the products had potential to deliver better 
value for money from the purchase and use of professional services. However, in the case of the Consultancy Knowledge Centre, Brokerage 
Model and Workshop, around half said that they neither agreed nor disagreed. - On the whole, boroughs thought that the Commissioning Toolkit and Guide 
to Buying Consultancy had the most potential to deliver better value for money. Both products involve the least amount of organisational change. - Five out of 11 boroughs said that lack of awareness and understanding 
among staff made it difficult for their authority to use the products. Procurement processes becoming too onerous and the lack of control over who procures consultants were also given as reasons. - In relation to promoting the benefits to London authorities, the most favoured 
options among boroughs were a London-wide event, support to promote the products internally and linking products to existing consultancy frameworks. - Sixty five percent of respondents said that they did not know enough about 
the products overall to be able to recommend them.  
 
Consultancy Knowledge Centre 
 
- Of the 8 out of 21 boroughs that have used one or more of the products, 
only 1 authority had used the Consultancy Knowledge Centre.  
 
- Understanding of how to use the Centre was split.  Five out of 10 boroughs 
did not understand how to use it while 4 out of 10 said that they did. - Seven of 12 authorities agreed that the Centre had the potential to deliver 
value for money from the purchase and use of professional services. None 
disagreed but 5 neither agreed nor disagreed. 
 
 
Consultancy Brokerage Model 
 
- The survey showed low levels of understanding of the Brokerage Model. It 
also showed that none of the surveyed boroughs were using it. - Only 1 out of 10 boroughs agreed that they knew how to use the brokerage 
model.  Six disagreed and the remaining 3 neither agreed nor disagreed. - However, 6 out of 11 agreed that it had the potential to deliver better value 
for money from the purchase and use of professional services while the 
other 5 remained undecided.  
 
A Guide to Buying Consultancy 
 
- This was one of the more popular products; however, only 6 authorities were 
using it. - Six of 13 said that they knew how to use it. 
- Eight out of 11 authorities agreed that it had the potential to deliver better 
value for money, while 3 were undecided.  
 
- Those using the Guide found it of value and were willing to recommend it to 
others.  
 
Consultancy Commissioning Toolkit 
 
- The Commissioning Toolkit was one of the most used products.  Five out of 
8 of those using one or more of the products were using the Commissioning Toolkit.  Understanding was relatively high compared to other products. - Six out of 12 boroughs said that they understood how to use the toolkit. - Nine out of 12 boroughs thought that it had the potential to provide value for 
money from the purchase and use of professional services.  
 
Buying Consultancy Services Workshop 
 
- Four out of 10 boroughs understood how to use the Buying Consultancy 
Services Workshop.  Of the 8 boroughs using the products, only 1 authority said it was using the workshop. - Information from London Met showed that at least 8 authorities had used the 
Buying Consultancy Workshop (including the GLA and the Olympic Delivery Authority (ODA)).  These authorities were: - LB Islington, LB Redbridge, LB Lambeth, LB Merton, City of London, LB 
Hounslow, Greater London Authority and the Olympic Delivery Authority.  
 
2.5 
Stakeholder communications plan  
 
The survey results suggested scope to increase usage through raised 
awareness and understanding of the products.  A stakeholder communications 
plan was developed (see Appendix 2) with the following communications objectives: 1 increase awareness and understanding of the products of the Professional 
Services Procurement Project (and the benefits) from 13 to 33 London authorities by 31 October 2009. 2 increase usage of the products from 8 to 20 London authorities by 31 
October 2009 
 
- Although any follow up survey might not score 100% in relation to 
authorities' levels of awareness - it was important to aim to engage every London authority. 
- The project timescales were affected by the decision to host a London-wide 
Project Showcase in November and the scheduling of the complementary workshops.  
 
2.6 
Communications activity carried out The following activities were carried out as part of the stakeholder communications plan developed to tackle the issues highlighted by the survey:  
 
A London-wide event held on 4 November 2009 - This took the form of a project showcase and included a number of other 
Capital Ambition projects to maximise the benefits to attendees. The aim was to raise awareness and understanding of the projects and stimulate borough participation.   
  
Rebranded Consultancy Commissioning Toolkit and Consultancy 
Knowledge Centre - The Consultancy Commissioning Toolkit and Consultancy Knowledge 
Centre were both re-branded from LCE to Capital Ambition to bring them up to date.  The Electronic Knowledge Exchange or 'EKE', as it was then called, was renamed the Consultancy Knowledge Centre (CKC) to distinguish it from the Agency Staff EKE and remove confusion. The Consultancy Knowledge Centre permissions were revised making it easier for non-London boroughs to access the centre. Also, registration requests were now being monitored and processed.   
 
Buying Consultancy Services Workshop 
 
- Five complementary Buying Consultancy Services Workshops were held 
between November 2009 and February 2010 to stimulate interest among authorities and encourage adoption of the course.  
 
Text for intranet and internal communications 
 
- Text explaining the five products was produced to help procurement teams 
disseminate information on the Consultancy and Professional Services 
Procurement project within their authorities.  Survey respondents said that 
they would find this useful.  
 
Management Presentation 
 
- A management presentation explaining the 5 products and outlining the 
benefits of each was sent to procurement teams to help them disseminate information internally.  Capital Ambition could also use the presentation to engage stakeholders e.g., SLT, CELC.  

## Consultancy Value Programme

- The project liaised with the OGC and East Midlands RIEP in relation to the 
Consultancy Value Programme which was being adapted for local government.  Information was fed back to Capital Ambition and London authorities were sign-posted to this work. Capital Ambition is liaising directly with OGC with regard to whether / how to take forward this work in London.  
 
Consultancy pages on the London Councils website 
 

A briefing paper for CELC to note and a briefing note for the CELC extranet site. 

- The project web pages were rewritten and updated with information relating 
to the five products.  The rebranded and revised Consultancy Commissioning Toolkit and accompanying project management documents, 
details of forthcoming workshops, the management presentation, the internal communications text and access to the Consultancy Knowledge Centre were also added to the site. Visitors were also sign-posted to the Consultancy Value Programme. - Prior to this, information on the project and access to the Consultancy 
Knowledge Centre had been split between the old LCE site and the London Councils site. Visitors were also directed to the Agency Staff EKE in error.  
 
2.7 
Stakeholders Stakeholder engaged included the following:  
 
Chief Executive's London Committee (CELC) 

| Heads of Procurement                              | Including regular email updates and information via    |
|---------------------------------------------------|--------------------------------------------------------|
| the CA newsletter (forwarded to HoP as many did   |                                                        |
| not know it existed).                             |                                                        |
| Society of London                                 |                                                        |
| Treasurers (SLT)                                  |                                                        |
| Briefings for SLT to note.                        |                                                        |
| Generally                                         | Project updates via the Capital Ambition website       |
| and newsletter, London-wide event etc.            |                                                        |
| London Contracts and                              |                                                        |
| Supplier Group                                    |                                                        |
| Articles for the LCSG newsletter.                 |                                                        |
| Office of Government                              |                                                        |
| Commerce                                          |                                                        |
| Sharing information on the London project and the |                                                        |
| Consultancy Value Programme led by OGC and the    |                                                        |
| East Midlands RIEP.                               |                                                        |

 

## 2.8 Budget And Project Spend Capital Ambition Funding 35000

|                                                  |       |
|--------------------------------------------------|-------|
| Consultancy fees (24 days at £475)               | 11400 |
| Consultancy Commissioning Toolkit rebranding     | 980   |
| Consultancy Knowledge Centre rebranding          | 825   |
| Support at the London-wide Showcase              | 1052  |
| Contribution to London-wide Project Showcase     | 871   |
| Buying Consultancy workshops x 5                 | 4000  |
| Adjusting access to Consultancy Knowledge Centre | 120   |
|                                                  |       |
| Total spent                                      | 19248 |
|                                                  |       |
| Balance                                          | 15752 |

 
3. 
Project Outcomes 
 
Findings from the May 2010 follow up stakeholder survey 
- A short follow-up survey of procurement teams was carried out in May 2010 
to monitor project progress (see Appendix 3).  The survey results showed good increases in levels of awareness and understanding in relation to the 5 consultancy products. - Twenty authorities responded to the survey.  With the exception of one 
respondent from Transport for London, all 20 respondents confirmed that they were aware of the project. The initial survey carried out in June 09 showed that 8 out of 21 authorities had not even heard of the project. - In both surveys, respondents were asked: 
Q1: 'To what extent do you agree that you understand how to use the products from the Consultancy and Professional Services Procurement Project?' 

 
June 2009 
May 2010 
|  Products          | Total    |
|--------------------|----------|
| disagree           |          |
| %                  |          |
| Total              |          |
| neither            |          |
| / nor %            |          |
| Total              |          |
| agree              |          |
| %                  |          |
| Total              |          |
| disagree           |          |
| %                  |          |
| Total              |          |
| neither /          |          |
| nor %              |          |
| Total              |          |
| agree              |          |
| %                  |          |
| Buying Consultancy |          |
| Services Workshop  |          |
| 40%                | 20%      |
| 0%                 | 0%       |
| Consultancy        |          |
| Knowledge Centre   |          |
| 50%                | 10%      |
| 0%                 | 0%       |
| Consultancy        |          |
| Brokerage Model    |          |
| 60%                | 30%      |
| 0%                 | 0%       |
| A Guide to Buying  |          |
| Consultancy        |          |
| 23%                | 31%      |
| 0%                 | 13%      |
| 25%                | 25%      |
| 0%                 | 0%       |
| Consultancy        |          |
| Commissioning      |          |
| Toolkit            |          |

 
- Although fewer people answered this question in the second survey than the 
first, the results indicate increases in awareness and understanding in relation to the 5 consultancy products.  In May 2010, none of the respondents who answered this question said that they did not understand the products. This is a positive change since June 09 and provides a solid basis for further work to increase usage of the products.  
 
- Respondents were also asked:  
 
Q2: 'To what extent do you agree that the following products have the potential to deliver better value for money from the purchase and use of professional services?' 
June 2009 
May 2010 

|  Products          | Total    |
|--------------------|----------|
| disagree           |          |
| %                  |          |
| Total              |          |
| neither            |          |
| / nor %            |          |
| Total              |          |
| agree              |          |
| %                  |          |
| Total              |          |
| Disagree           |          |
| %                  |          |
| Total              |          |
| Neither /          |          |
| nor %              |          |
| Total              |          |
| Agree              |          |
| %                  |          |
| Buying Consultancy |          |
| Services Workshop  |          |
| 0%                 | 44%      |
| Consultancy        |          |
| Knowledge Centre   |          |
| 0%                 | 42%      |
| Consultancy        |          |
| Brokerage Model    |          |
| 0%                 | 45%      |
| A Guide to Buying  |          |
| Consultancy        |          |
| 0%                 | 27%      |
| 0%                 | 25%      |
| Commissioning      |          |
| Toolkit            |          |

 
- Many respondents agreed that the products have the potential to deliver 
better value for money, although opinion is now more mixed particularly with regard to the Brokerage Model and Consultancy Knowledge Centre. 

## Buying Consultancy Services Workshop Feedback

- Thirty-nine people from 21 London authorities attended the 5 
complementary courses that took place between November 09 and February 10 (see Appendix 4). The feedback from attendees was very positive.  As a result, LB Hammersmith and Fulham ran an in-house workshop and LB Merton ran three. The contract to run the course is currently out to tender.  
 
Consultancy Knowledge Centre - There are now 16 authorities registered as Consultancy Knowledge Centre 
users. However, LB Islington is the only authority that has entered contract information.   
 
Information and Resources 
 
- The survey showed that some authorities are making use of the information 
provided on the Capital Ambition website as well as resources such as the management presentation and intranet/internal communications text.  
 
3.1 
Conclusions 
 
- Usage of the products is still fairly low.  However, as a result of 
communications activity to date, there have been promising increases in levels of awareness and understanding. - This will form a solid basis for further communications work to increases 
product usage by London authorities.  
 
3.2 
Recommendations for further work  
 
It is recommended that: 
 
1. 
Stage 3 of the project is closed.  
 
2. 
Capital Ambition reviews the project web pages on an annual basis 
ensuring that they are kept up to date 
 
There is a balance of £15,752 remaining in the budget.  
 

Project/Subject:  
London Energy Project 
Michael Wood - Programme Director 
Report by: 
Agenda item: 8 
michael.wood@haringey.gov.uk 
Strategic Theme: 
Energy Procurement, Processes Efficiency, Energy Management and Carbon Reduction 

 
Purpose: 
To receive the Phase 3 closure report and provide the Board with: 
ƒ 
An overview of current significant achievements and efficiency gains/savings 
ƒ 
An overview of key challenges for the future, including re-baselining of savings to 
2009/10 
ƒ 
The need for continued leadership and support to embed change in boroughs and to identify further potential savings and benefits. 
ƒ 
A high level overview of proposed programme activities, deliverables and their 
benefits 
 

 Addition al Funding Request 
Spend to date 
£ 
 
Financial implications: 
Financial 
 Year 
Existing Project Allocation 
£ 
Committed to date 
£ 
Balance 
£ 
Total Existing Funding + Additiona l Funding Request  
Phase 1 
2004/2005 
33,400 
33,400 
33,400 
0 
0 
33,400 
Phase 2 
2005/2006 
30,000 
30,000 
30,000 
0 
0 
30,000 
2006/2007 
50,000 
50,000 
50,000 
0 
0 
50,000 
2007/2008 
70,444 
70,444 
70,444 
0 
0 
70,444 
Phase 3 
2008/2009 
280,000 
7,641 
7,641 
272,359 
0 
280,000 
Phase 4 
2009/2010 
0 (c/f of 
£272,359) 
101,446 
101,446 
170,943 
£149,000 
149,000 
2010/2011 
0 
0 
0 
0 
 
 
2011/2012 


Total 
149,000 
612,844 

Executive summary: 
 
The London Energy Project (LEP) has delivered both cashable and non-cashable savings. It has successfully demonstrated its value over the past four years and provides proportionate and directed leadership, including practical support to boroughs to respond to common challenges and developments in energy supply and process. It has become a key central resource and focal point and has established relationships with many parties and stakeholders involved in public sector energy supply and use. The principal project activities delivered in 2009/10, and high-level benefits summary are detailed in the attached closure report, which also includes an overview of recommended future activities for 2010/12, (Appendices 1 & 2). Best practice procurement LEP's initial priority was to transform energy procurement from traditional tendering methods to flexible purchasing contracts which help manage the risks involved in buying on volatile commodity markets.  This activity is almost complete, but the challenge now is to drive continuous improvement in buying organisations, ensure transparency in terms of performance and value for money and introduce steps to better manage the utilities supply chain. 

Process efficiency and improvement LEP has worked with GS1UK and the utilities industry to develop a new global standard for a multi-site consolidated invoice. Design is nearing completion and now requires implementation support to manage adoption by boroughs.  It is forecast that boroughs' operational costs will be reduced through the use of a common standard; payment processes will be improved and management information will become more accurate and accessible. The project previously developed a 'Self-Assessment Action Plan' which enabled Boroughs to measure their current energy capability and performance, and to identify improvement opportunities.  A refreshed version of the 'Action Plan' will be developed that addresses a broader range of strategic and operational issues, which extends to evidence gathering and is auditable to support further improvements across a range of measures.  Improvements will focus on customer practices and identified ways of reducing the cost to serve for suppliers, which can be passed through to boroughs to maximise benefit. 

Sustainability and Carbon Another key challenge for London local authorities is to comply with and effectively manage the risks and opportunities presented by the Carbon Reduction Commitment (CRC).  LEP is already recognised nationally for its knowledge and expertise in this area and is very well positioned to develop further best practice and tools to aid compliance and mitigate risks. LEP also has been asked by boroughs to investigate solutions for carbon trading, financial management and carbon reduction.  It is anticipated the purchase of carbon allowances across London boroughs will be somewhere in the region of £25million, and the potential fines and reputational damage for non-compliance or inaccurate reporting are severe. LEP has planned CRC energy and finance modules it anticipates launching by Autumn 2010.  As this has a national benefit and to reduce Capital Ambition's costs, LEP planned for this to be funded nationally by the RIEPs (£6k each).  Due to RIEP uncertainty these tools may not be progressed if alternative funds cannot be identified and accessed. Reducing energy consumption and generating optimum return on investment for capital projects, in terms of energy efficiency is not coordinated across London.  LEP has plans for a Pan-London review of energy efficiency measures already implemented, analysis of their success rate, barriers to change and an evaluation of current public sector building performance.  To add value to participant boroughs a CRC health check, will be carried out at the same time.  A PID for this project has been submitted separately. 

Collaboration, knowledge transfer and best practice LEP supports strategic change and is user led, responding to practical priorities identified by London Boroughs' finance and energy management community.  LEP has realised benefits for participants through collaborative activities ranging from informal knowledge sharing to producing best practice guidance and case studies to commissioning services.  There is an expressed need for this activity to continue, and also for proportional and directed leadership, which challenges established ways of working and assists stakeholders with managing change within their own organisations. LEP is well placed to continue its effective communication through established routes, such as newsletters, workshop events and best practice toolkits. 

Influencing policy development  
Finally, LEP has the ability to connect with other organisations at a strategic level through 'Coordinated representation'.  This has increased local government's influence in policy consultations and improved customer service levels with service providers.  It should continue to ensure London local government interests are heard and responded to. 

Measurable savings and efficiency LEP is looking to target annual savings of approx £35m across London boroughs (against CSR 07 targets) through the effective management of buying organisations, identifying further opportunities for procurement cost avoidance, improvement in the efficiency of borough administration and payment processes, expanding the scope and quality of bureau style services and reducing the risks and costs associated with carbon reduction. 

## Project Outcome (S):

ƒ 
Measurable savings and efficiencies delivered through borough adoption of 
recommended procurement, sustainability and transaction improvements, circa £35m p.a. (based against CSR 07 targets) 
ƒ 
Cashable and non-cashable savings realised through process efficiencies 
resulting from the adoption of consolidated invoice processing and payment practices 
ƒ 
Improved services and increased transparency of the performance of buying and 
service organisations and service providers operating within London 
ƒ 
Improved understanding of strategic supply issues; potential benefits identified 
through a centralised expert client function and boroughs enabled to benefit from a managed market 
ƒ 
Increased capability and culture change within boroughs through knowledge 
transfer and adopting best practice 
ƒ 
Managed risks and costs associated with compliance and trading within the 
Carbon Reduction Commitment; opportunities for reputation and financial benefits identified 
ƒ 
Strategic approach to carbon reduction pan-London, including routes to market for 
technology and implementation solutions 
ƒ 
Continued high level representation on value for money and other policy issues 
for London boroughs with central government departments, suppliers and service 
providers 


Key Risks: 
- 
Process, practice and culture change in London Boroughs is still being embedded.  
Change may stall or fail without LEP's continuing support and leadership. - 
The future of the LEP beyond Capital Ambition funding 2011 is unclear, yet current 
work-streams and London public sector demands will extend programme activities until at least 2012/13.  In the absence of LEP's centralised resource and expertise it is unlikely that efficiency and improvement activity will be sustained at the current 
level and performance standards maintained. - 
Recommended future funding options (Capital Ambition Review of London Energy 
Project, December 2009, PA Consulting Group) need to be addressed, to ensure continued cooperation of government departments, buying organisations and skilled capacity within the project itself  
 
- 
LEP's role is varied and contains many interdependencies on activities across the 
work programme, e.g. certain CRC compliance issues also lead to best practice 
procurement.  Balancing priorities and having flexibility and adaptability to changing circumstances through governance and consultation is vital 
 
 
Recommendations: 
That the Board: (i) 
recognises the achievements and realised benefits in the Phase 3 closure report;
(ii) 
endorses the draft programme of work activities/benefits attached at Appendix 2 
(subject to re-baselining against 09/10); and 
(iii) 
if the Board recognises the need for LEP to continue on a more permanent 
basis, to consider and resolve future funding and hosting options with key stakeholders appropriate as soon as possible. Appendices:  
Appendix A:  Phase 3 closure report 2009/10 Appendix B: 
CPB Flex Contract Savings for London 
Appendix C:  DRAFT Overview of future activities and benefits 2010-2012 
Background papers: None 

## London Energy Project Phase Iii Closure Report 02 July 2010

 
Report of Michael Wood, Programme Director 
 

## Contents

| 1. Executive overview    |   3  |
|--------------------------|------|
| 2. Introduction          |   7  |
| 3. Summary               |   8  |
| 4. Lessons learnt        |  11  |
| 5. Benefits realisation  |  15  |
| 6. Ongoing arrangements  |  19  |
| 7. Sign-off              |  20  |
| 8. Acknowledgements      |  20  |
| Appendix 1               |  21  |
| Appendix 2               |  23  |
| Appendix 3               |  24  |
| Appendix 4               |  25  |

## Phase Iii - Executive Overview

 
1.1 Energy procurement and price risk management The energy market is volatile; prices can fluctuate up to 5% on a given day and up to 100% in a year.   London local authorities alone spend approximately £300 million per year on energy - a huge risk and equivalent opportunity for efficiency savings. The energy suppliers and their supply chain are fairly unresponsive and slow to change, customer service and utility invoicing tends to be patchy as does quality of management information provided to customers.  This is due to a range of issues ranging from their own regulatory obligations and reliance on grid operator performance through to competition being limited to 'big six' companies. Central Purchasing Bodies (CPBs) have improved their energy procurement strategies, although transparency of performance, demonstration of value for money and management of utility suppliers remain key issues. In 2005, none of the CPBs used by many London authorities offered aggregated, flexible, risk managed (flex) contracts.  Flex contracts smooth the volatility of market forces, provide better value for money and enable better cost control.  Purchasing bodies traditionally provided contracts to the public sector whereby the price for all supply requirements for a year or more, often with multiple suppliers, was fixed on a single day.  Fixed term, fixed price contracts give only a 1 in 220 chance of buying on the cheapest day and constantly changing suppliers generates an administrative burden and does not enable closer working with suppliers.  The business case for moving to a risk managed approach in a highly volatile market was obvious.  However, the London public sector was not geared to aggregate its supply requirements and nor were its service providers and suppliers. 

## 1.2 Change Management

London was **dealing with the market from a weak position**.   A transition had to be made from historical fixed priced strategies and the cost inefficiencies of individual purchasing to a position of working together and increasing collective buying power to a large enough volume to share a procurement solution. 

The London Energy Project (LEP) needed to work with provider organisations and their suppliers to make a parallel transition, operate within wholesale markets and change the basis of their public sector contracts. 

In Phase II the project produced a specification of requirements for London authorities.  The project evaluated three Central Purchasing Bodies (CPB) against the specification of requirements, recommending two CPBs for use in London to provide aggregated, flexible, risk managed energy contracts and the third CPB agreeing to a improvement programme that should enable them to achieve the LEP requirements in due course. 

1.3 LEP's approach 
 
LEP has established a successful methodology of accelerating large-scale change of multiple participants, providing a centre of expertise, building trust and confidence and meeting the needs of differing and varied stakeholders (see Appendix 4).  This has led to virtually all London boroughs and GLA functional bodies implementing recommended improvements to energy procurement; 
adoption and use of the CRC Toolkit and delegating authority to LEP to represent their interests. The elements of LEP's approach could be replicated in other commodity areas and involve: 
ƒ 
identifying necessary improvements and developing a supporting delivery strategy 
ƒ 
articulating the business case and measuring benefits 
ƒ 
working across  organisations - with energy management, finance and procurement 
communities 
ƒ 
providing improvement plans, implementation tools, business cases and individual borough 
support 
ƒ 
communicating clear, consistent and coherent messages to energy and finance managers 
ƒ 
delivering relevant events, which cross-cut borough work streams and provided delegates 
with real life experience to accelerate in-borough adoption 
ƒ 
meeting the needs of boroughs, supporting their day job, lobbying relevant government 
departments, playing a lead role on the national agenda and challenging suppliers where appropriate 
ƒ 
working with suppliers and service providers to meet customer needs and expectations 
ƒ 
taking a centralised and pro-active enabling role for boroughs, not just a toolkit or web tool, 
but a low-cost delivery agent for big change, managed by local government for local government 

## 1.4 Other Pressures

Alongside routine energy procurement and energy management, all London boroughs must reduce energy consumption, meet challenging carbon reduction targets and comply with the CRC Energy Efficiency Scheme (CRC), an obligatory emissions trading scheme covering both public and private sectors. The CRC presented a new pressure for London that had not been part of the project's plan at the commencement of Phase III.  However, at no additional cost, LEP added this requirement to its scope in order to help boroughs meet the demands of the CRC and reduce the costs, risks and administrative burden to boroughs.  Subsequently, the project's work on the CRC has also reached out to the public sector across England and Wales. 

1.5 Key challenges 
 
The challenge in 2010 and beyond  
Organisations buying and managing energy will need to: 
ƒ 
Reduce energy use and carbon emissions; in an increasingly pressurised budget environment 

ƒ 
Minimise energy costs, forecast energy budgets and manage risks in a volatile energy 
market 
ƒ 
Deliver savings against new baselines established for 2009/10, which will be a real 
challenge given this was a year when energy prices were very low and supplier margins already substantially reduced through aggregation 
ƒ 
Reduce energy payment and invoice administration costs and improve the accessibility and 
quality of financial and energy demand management information 
ƒ 
Comply with and manage the risks and costs associated with the Carbon Reduction 
Commitment and carbon trading 
ƒ 
Ensure capital investment opportunities to reduce energy consumption also maximise 
savings opportunities 
 
LEP will need to 
ƒ 
Ensure buying organisations and their suppliers improve the quality and value of service 
delivered 
ƒ 
Ensure that compliance criteria and savings methodologies for buying organisations are 
robust, transparent, accurate and appropriately provided to Capital Ambition and London customers 
ƒ 
Identify new savings opportunities, such as power purchase agreements, renewable heat 
incentives and feed-in tariffs 
ƒ 
Continue to successfully lobby Department of Energy and Climate Change (DECC) and 
other government departments, in order to reduce local authority costs and administrative burden 
ƒ 
Continue to support boroughs on their preparations for the CRC scheme, providing 
knowledge and tools which enable boroughs to register and manage the costs and risks within the scheme.  This work is ongoing, as the demands of the scheme and the vagaries of compliance become clearer, yet more complex 
ƒ 
Develop methods for boroughs to implement processes that reduce back office costs for 
energy invoice payments and electronic bill validation to maximise cost recovery  
ƒ 
Establish effective demand reduction approaches that can be applied at a pan-London level 
maximising savings and capital investment opportunities Together, LEP, London boroughs and GLA functional bodies will need to address these challenges to deliver value for money and make improvements in the areas that will support corporate 
priorities and in-house efficiency and savings. 1.6 LEP continuation 
How LEP is resourced and continues to be funded after its current Capital Ambition grant expires in March 2011 will have a significant impact on - 
Maintaining a collaborative and aggregated pan-London site portfolio 
- 
Accelerating change and sustaining common approaches to improvements to process 
efficiency and carbon reduction 
- 
Identifying opportunities, managing strategic change, delivering savings and achieving 
efficiencies 
- 
Providing effective peer challenge to current practice, supplier practice and recommending best 
practice 1.7 Benefits delivered 
 
- 
Savings from the use of aggregated, flexible, risk managed contracts 
This figure is based on the volumes of electricity and gas that London boroughs consumed through LASER and Buying Solutions compliant contracts, within full or part year 2009/10 (dependent on the date they joined the compliant arrangements).  The figures do not include benefits generated by LB Greenwich and Southwark, as these have not delegated authority to LEP to receive and/or analyse their data. (The figures are based against 2007 CSR targets.) 
o *Savings figures from LASER and OGC to follow*. - 
28 London boroughs and all GLA functional bodies have changed or are due to change this 
year to compliant aggregated, flexible, risk managed energy contracts (see Appendix 1). - 
Delegated authority letters have been received from 31 authorities in London (see Appendix 1), 
which will allow the project to specify London's energy requirements more effectively and manage supplier relationships. - 
4 events with excellent feedback and an average attendance of 73 delegates were hosted 
across the project's work streams.  Delegates have expressed the relevance to their work and how they have aided practical implementation (see Appendix 3). - 
Over 400 copies of the CRC Guide and Toolkit have been distributed across England and 
Wales and all London authorities are using the toolkit and user guidance. 

## 2. Introduction

 
This closure report outlines the achievements of Phase III of the London Energy Project1 (LEP), including lessons learnt and realisation of benefits.  It should be noted that the project is continuing and that the challenges and benefits moving forward are detailed in Appendix 2. 

## 2.1 Background

The UK public sector spends more than £3.8bn per year (2008/09) on energy and it is vital that authorities have the right strategies to manage this.  Following a lack of clear strategic options in an increasingly volatile energy market, authorities recognised the need to improve energy procurement practices in London. The LEP is focussed on identifying and implementing best practice in energy (gas, electricity and oil) procurement, its supporting processes and Carbon Reduction Commitment in the London public sector. The project brings together a diverse range of organisations to significantly improve the way energy is managed and procured. The project has been delivered as follows: Phase I - Review The first phase of the project involved a review which evaluated the procurement processes of 21 London Boroughs, the London Fire and Emergency Planning Authority and 7 Thames Valley Boroughs from the South East Region. This report was published in March 2006 and found that there was a small group of participants consistently achieving good prices, compared to a larger group who were not achieving good prices. Furthermore, even the best performing authorities fell short of best practice.  This indicated that there were significant areas for improvement. Phase II - Action planning and implementation of best practice Following the review, the Local Government Energy Procurement Action Plan was established to implement the recommendations from Phase I. 

## Phase Iii - Benefits Realisation

Growing from the success of Phases I and II the project moved into focussing on 3 work streams: best practice energy procurement, efficiency and improvement and the Carbon Reduction Commitment (CRC). 

## 3. Summary 3.1 Major Activities Completed In Phase Iii

- 
Development and publication of a **Guide and Toolkit** in collaboration with energy consultants 
Pulse 24 to help local government organisations in England plan for the Carbon Reduction Commitment.  All London boroughs have downloaded a copy of the Guide and it has also been distributed to over 400 users across England and Wales.  The toolkit has received excellent feedback from users and subsequently further tools are currently in production.  
- 
Delivery of **events** covering the project's key work streams with an average attendance of 73 
delegates.  All events were well attended and satisfaction levels were consistently high (see Appendix 3 for examples of the feedback received).  The four events held were:  
o Bureaus, billing and e-issues workshop, held in January 2009.  The event was held 
for London public sector organisations to learn more about best practice energy billing, automating processes and to find out more about bureau services.   
o Energy management and administration best practice, held in April 2009.  The 
purpose of the event was to explore how adopting bureau style services, whether outsourced or delivered internally, could add value to energy management and administration.  
o CRC launch event, held in June 2009. The event was held to mark the launch of the 
CRC Guide and Toolkit and to provide a real-life practitioners' view of the CRC and its environmental and financial impacts as well as providing answers to delegates' questions on implementing the CRC. 
o CRC Festive Cheer, held in December 2009.  The event provided an update on 
changes to the CRC Energy Efficiency Scheme, and enabled delegates to learn more about practical issues surrounding its implementation, i.e. finance, carbon reduction, risk management and operations. 
- 
Development of **fact-sheets** to assist public sector authorities in the decisions taken in their 
energy procurement.  Fact-sheets have covered Automated Meter Reading, Adoption of Flex Contracts, Available Options for Risk Managed Contracts and a series of fact-sheets relating to the CRC.  We also developed a fact-sheet on the use of a letter produced by the project for boroughs to use in response to debt recovery letters from energy suppliers, which has already seen boroughs save money that would otherwise have been paid.  The fact-sheets have been held up as an example of leadership in the sector by the Office of Government 
Commerce.     
- 
The Energy Consortium (TEC) was **re-evaluated** against the Specification of Requirements 
developed in Phase II of the project.  TEC did not meet the Specification of Requirements on this occasion.  The project has been in contact with TEC throughout Phase III to help them work towards meeting the requirements.  LASER and Buying Solutions have worked with LEP on delivering improvements and new products for their customers.   
- 
The project has worked with GS1UK and the utilities industry to develop a new global XML 
billing standard for a multi-site consolidated invoice, with the final version due to be 
completed in 2010.  GS1UK represents major energy suppliers in the UK.  The new standard 
will enable more efficient invoice processing within boroughs that adopt the standard. The UK Government, Cabinet Office have already recognised the new standard through its IT Architecture Board. 

- 
Customer consultation was undertaken on the future support required from the LEP and to 
develop a work plan for the next few years. To ensure the project continues to meet borough needs, stakeholder workshops for energy, finance and procurement managers were held in late 2009 to shape the key deliverables and efficiency challenge.      
- 
The project was **re-branded** providing the project with its own identity.  This has helped to 
promote the project as an independent organisation, providing a source of support and best practice to boroughs and other stakeholders such as suppliers and central government.  The project now has a recognisable logo representing clear project aims: Smarter Buying, Less Carbon, A Better Deal.   
- 
The project created the **right conditions for Flex Contracts,** appointing a dedicated 
Improvement and Efficiency Manager, working with London authorities, energy providers, 
regulators and policy-makers; hosted focus groups, workshops, guides and online resources for London authorities; met with strategic and operational staff within individual authorities; engaged the Society of London Treasurers.  A programme of 13 events, 25 individual meetings and a programme of regular communication supported change in the market.  

## 3.2 Key Outcomes From Phase Iii

- 
Savings for London seen through the adoption of recommended contracts.  LEP worked 
with the Pan Government Energy Project to produce a savings methodology for the use of compliant contracts that has been approved by the National Audit Office.  The methodology has been used to calculate the savings based on the volume of energy consumed in 
2009/10. 
- 
Adoption of recommended contracts by the majority of London authorities.  The use of 
aggregated, flexible, risk managed contracts for energy provided by the recommended Central Procurement Bodies (CPB) has been adopted by 28 London boroughs allowing opportunities for savings and efficiencies of approximately 9% on the annual spend on energy by London boroughs.     
- 
Better products for the local government market.  A framework agreement for automated 
meter reading is offered by Buying Solutions, which will improve the quality and accuracy of reported data and also provides a benefit to boroughs for the CRC scheme.   Customer groups have been formed with the aim of managing suppliers, e.g. bureau and energy management software providers.  These will be expanded on moving into the next phase of 
the project. 
- 
Increased awareness of the Carbon Reduction Commitment among Finance Managers, 
Energy Managers and other relevant officers.  The CRC Guide and Toolkit and its subsequent updates have provided officers with the knowledge and tools for councils to aid 
compliance and mitigate risks.  The project is recognised as a leading source to build capability and capacity. 

- 
Secured major energy supplier support for the adoption of a global XML billing standard.  
GS1UK is the standards agency for electronic invoicing and has been working with the project on the development of an XML e-billing standard that will enable transparent invoicing, the ability to process payments more efficiently and a reduction in payment costs. The LEP chairs the GS1UK development board in this instance. 
- 
National recognition of the project.  The LEP received a Government Opportunities award 
for Best Procurement Innovation or Initiative.  The judges recognised the potential for the project to benefit the public sector throughout the UK.   
- 
LEP is recognised as a **key stakeholder/consultee**.  Strategic relationships have been 
developed with the Local Government Association and the Chartered Institute of Public Finance and Accountancy on energy/carbon efficiency and policy areas.  The project has received delegated authority from 31 of the 33 London boroughs, which will allow the project to work with energy providers and suppliers to provide improved services to their customers in London and to lobby central government on behalf of London boroughs. 
- 
LEP represents the voice of local government as a member of the National Collaborative 
Category Board (Energy) and is actively involved with the delegated Energy & Strategy Team in developing new strategies and improvement programmes for the public sector as a whole. 

## 4. Lessons Learnt 4.1 What Went Well

Through the project to date, London public sector bodies are now better organised for energy procurement in a volatile market. 
Management support 
- 
Capital Ambition Efficiency Board has continued to support the project, and we have also 
continued to receive the support of the Society of London Treasurers and London Finance Advisory Committee.  Bringing together relevant internal departments and providing information to key decision makers has been a key route to change. 
 
Strengthening the voice of local authority customers 
- 
The project continues to communicate the requirements of public sector customers in 
London to service providers.  This has enabled the project to directly influence suppliers to deliver a service that better meets the requirements of the public sector.  Through this relationship it allows the customers to shape the service provided by suppliers, rather than the service available being dictated by suppliers.  Further enhancement of services 
provided is already being seen, through the project's influence.  This level of engagement with energy procurement providers and suppliers would have been impossible without collaboration, brought about by the LEP.   
- 
The project has used its influence to lobby central government on a number of issues.  
Through its relationship with the Department for Energy and Climate Change LEP lobbied for an essential change to the CRC to exclude social housing from the scheme.  The project also liaised with the Office of Government Commerce to increase transparency and accuracy of the savings calculated through the Pan Government Energy Project's savings methodology. 
 
Collaboration 
- 
The project has worked with a variety of organisations across its 3 work streams throughout 
the course of Phase III and has built a resource pool of  organisations with specialist knowledge that have provided added value to the project's work.  Work on the Carbon Reduction Commitment has been enhanced through collaboration with the Department for Environment and Climate Change (DECC), the Local Government Association (LGA) and the Chartered Institute of Public Finance and Accountancy (CIPFA).   
- 
The project continues to work closely with these agencies as DECC develops the CRC 
scheme into its final format prior to its inception.  Working with LGA and CIPFA the project has been able to provide a collective voice on behalf of local government authorities across London.  Links established with CPB organisations through the project's work in Phases I and II have also led to the provision of procurement solutions that will be of benefit to authorities in the CRC process, e.g. the provision of an AMR framework agreement by Buying Solutions.  
- 
The project has been working in collaboration with the GS1UK user group on the adoption 
of a global XML billing standard.  The production of the new schema is predicted for October 2010.    
Development of CRC Guide and Toolkit 
- 
There was great interest in the CRC Guide and Toolkit, with 140 delegates representing 
organisations from around the country attending the official launch event in June 2009. Likewise the interest in downloading the Guide and Toolkit has been excellent, with over 400 eligible applications to download the document from around the country.  All London boroughs have adopted the toolkit. 
- 
Following the excellent reception of the initial event to mark the launch of the toolkit a further event on the CRC was held in December 2009.  
- 
Ongoing stakeholder engagement has enabled the project to target to those areas where 
boroughs face the greatest challenge or display inefficiencies in order to provide support in relation to the CRC. 
  
Engagement / structure 
- 
The project has been able to bring together finance managers, procurement managers and 
energy managers through working directly with officers and has been able to bridge the gap that exists between these individuals within boroughs, by running events and borough meetings involving representatives from both sides. Communications 
- 
The project has continued to reach officers across London through its communications 
output, including quarterly newsletters and regular e-bulletins.     
- 
The project has delivered presentations and seminars on various topics and has continued to produce fact-sheets providing updates and useful information on the project work 
streams.   
- 
Our communications have been successful due to the team's ability to engage with many 
varied stakeholders in London, across the public sector nationally and in the private sector. Several fact-sheets have been developed by the project, providing information and guidance for public sector organisations, covering various topics relevant to the project's work streams.  These have been distributed across London and (where applicable) the 
public sector in England.  The success of our communications has stemmed from the fact that they are written by local government for local government, so we understand the needs 
and issues of local government.  
 
Provision of expert support 
- 
The project has offered a range of support to London public sector bodies, both from public 
and private sector organisations.  This has come in the form of events hosted by the project and presentations to other organisations representing the public sector, e.g. Regional Improvement and Efficiency Partnerships.  Delegates have offered positive feedback, 
indicating that workshops run have been very useful and informative (see Appendix 3 for examples of the feedback received).   
 
Project delivery team 
- 
The project has benefited from an experienced professional team: 
- 
The Programme Director, Michael Wood, is an experienced Head of Procurement, with a 
track record of implementing innovative procurement and business improvement initiatives. 
His drive to ensure that London public sector bodies continually improve performance and achieve best value in their energy procurements is integral to the success of the project. 
- 
The Programme Managers in Phase 3 (Joanna Chambers, Emma Cahillane and Richard 
Le Donne) have contributed extremely professionally and with high impact results. 
- 
For Phase III initiation, the LEP recruited an experienced public sector professional, 
Amanda de Swarte, to a full–time improvement & efficiency and category management role. Amanda has rapidly established herself as a key resource to the London public sector, supporting bodies to develop business cases for change and working with service providers to deliver improvements. 
- 
The Programme Officer, Shena Aitkenhead, has provided the project with excellent 
organisational and administrative support, undertaking strong research and data analysis and ensuring that the improvement programme has been recorded and quantifiable. 

## 4.2 What Could Be Improved

The project board The project board has consisted of officers from across the public sector in London, representing London boroughs, Metropolitan Police and the Office of Government Commerce.  Throughout the course of Phase III there has been concern from board members as to the role of the board.  The board has functioned as a link between the project and its key stakeholders in order to inform them of the key topics for discussion, but has not operated as a decision-making body.  The format of meetings has been revised to allow for greater discussion on decisions to be taken. There was growing concern that the chair of the board was increasingly unable to attend board meetings, and as a result of this the chair stepped down from the post.  Two new members representing the Society for London Treasurers/London Finance Advisory Committee were appointed from October 2009, to act as leads on the project and to chair board meetings.   Since their appointment the structure of board meetings has improved and the board has a clearer view of its role as an approval body and "critical friend". 

The project will be using the results of the review conducted by PA Consulting plus work with key stakeholders to shape the project moving forward.  During this process the format and make up of the board will be reviewed. 

 
Conversely interest from officers in the events and information produced by the project has been high. 

Lack of feedback Some boroughs are unwilling to provide details of Central Purchasing Body performance.  This makes specifying common needs for improvement more difficult for the project.  The use of delegated authority, which has been received from 31 of 33 boroughs, will allow the project to gather information more effectively in order to identify common needs among London boroughs. Adopting common practice and standards It is essential that London builds on the success of changing procurement processes, but at the moment boroughs are at different points of implementing improvement and change (including a range of energy related activity as well as procurement, e.g. transaction and management).  
 
Moving forward boroughs will need to accelerate the ability to adopt more efficient energy practices. 

Low customer expectation London boroughs have become used to the poor standards of the utility industry and associated supply chain and therefore do not provide sufficient challenge or demand high quality service, therefore value for money is still a key issue.  Additionally, many customers are very dependent on their service providers and reluctant to seek improvements or place too many demands on them.  
This inertia needs to be sensitively managed and LEP can play an important intermediary role. 

## 5. Benefits Realisation 5.1 Achievement Of Objectives In Phase Iii

Objective 
Progress at end of Phase III 

To implement the Action Plan and Best Practice Guides to achieve best value and energy efficiency.  
Due to the take-up of additional commitments it was not possible to fully develop an Action Plan for Phase III.  A new performance review and improvement tool will be developed in Phase IV, incorporating the new challenges faced by boroughs, e.g. the CRC. The CRC Guide and Toolkit produced by the project includes a CRC compliance and best practice tool.  The CRC Guide and Toolkit has been downloaded by all 33 authorities and the GLA group in London. The project has developed a number of best practice fact-sheets that looked at a number of different issues relating to procurement and energy management and have provided officers with advice in respect of their decision making processes, as well as providing important information on legislation in a way they can better understand in order to be made fully aware of any issues that may affect them.  
To raise awareness of the benefits of energy efficiency with the aim of improving demand management.   
This was not a key priority for Phase III and the project needed to focus its attention on other areas of its objectives, most notably the focus on procurement and the CRC. Moving forward an energy efficiency review for London boroughs is planned, subject to approval. The project influenced the approved Central Purchasing Bodies to set up framework agreements for automated meter reading 
(AMR) 
and voltage optimisation.  These frameworks will both have a positive impact in reducing energy demand and usage. 

To implement the recommendations from the LCE/SECE Energy Review Report published in March 2006.  
The two CPBs recommended by the project to provide aggregated, flexible, risk managed contracts were evaluated against the Specification of Requirements developed in Phase II of the project and continue to improve the service delivered. A further CPB was assessed but currently does not meet the Specification of Requirements.   To date 28 London boroughs + all 3 organisations in the Greater London Authority have moved or are due to move to flex contracts provided by the recommended CPBs. The project has influenced boroughs to adopt improved bill validation, either by improving in-house processes or by appointing bureau services to carry out bill validation on their behalf.  Savings on erroneous invoices are typically 1-3% of the total energy spend. The XML e-billing standard should link up better with the financial and energy management platforms that are used by boroughs and therefore increase the efficiency of the process. Another recommendation was for the improvement of data quality.  The use of automated meter reading will improve meter asset management and improve the quality of data reported.  The project has worked with Central Purchasing Bodies to offer AMR framework agreements for customers to access and this will also be beneficial in terms of the CRC.     
To facilitate the implementation of the Energy Procurement Action Plan across the London public sector, to enable continuous improvements in the 4 specific areas of: e-billing, procurement, terms and conditions and automated meter reading (AMR) 
Work on a global XML e-billing standard has continued through Phase III and is due to be finished in Phase IV.  The development of a global standard will bring a number of benefits in terms of process efficiency, cost savings through support of fewer standards and the ability for suppliers to develop added value billing services for customers.   
As discussed previously 
28 
London boroughs + all GLA functional bodies have moved or are due to move to flex contracts. LEP has worked with Buying Solutions to offer an AMR framework agreement which is now operational.   
To continue to work with at least three Central Purchasing Bodies (CPB) to develop recommended procurement options and continuous improvements on their capability to deliver these, to provide choice and confidence of best practice to London public sector bodies Two CPBs have met the specification of requirements.  The project continues to work with a third CPB in order to meet the LEP requirements.  Strategic supplier engagement has already begun with the two CPBs recommended by LEP, and energy suppliers to discuss savings. These meetings are to become a regular event through the next phase of the project.  
To facilitate the adoption of LEP 
recommended contracts by August 2009 
The measure for this objective was for 40% of gas and electricity contracts that could be renewed by August 2009 to be on recommended contracts.  28 of the 33 London boroughs now use flexible procurement for provision of their gas and electricity, with a further borough using a mixture of flexible procurement and fixed term, fixed price arrangements.   
To enable participating bodies to demonstrate cost efficiencies through adopting recommended risk managed contracts The project has been in contact with the OGC to ensure robust, transparent savings data are available for London. We will work with CPBs to introduce borough level savings statements. 

To continue to promote non-procurement efficiency initiatives, enabling participating bodies to achieve further efficiency gains The project has identified potential monetary (cashable and non-cashable) and efficiency savings of £10.7m that may be achieved through the adoption of promoted best practice non-procurement efficiency initiatives (see Appendix 2 for details [excluding adoption of aggregated flexible contracts]). Consultation was held in Phase III on the future of the project, examining the role, aims and objectives of the project and To recommend category management arrangements for energy in the London Public Sector beyond the end of the 

 
project  
focussing on the issues relating to energy 
that will affect London moving forward. The work in this process was used in the planning of the next phase of the project to focus the project's attentions on those areas of work that will be of greatest benefit and relevance to boroughs.  As part 
of 
this 
process 
the 
project 
commissioned PA Consulting to formulate the planning for the next phase and ongoing project arrangements, including looking at the arrangements in the event that the project comes to an end. This objective was taken on whilst Phase III was in progress.   
To develop a guide and toolkit on the Carbon Reduction Commitment (additional) 
The Guide and Toolkit was launched in June 2009.  Since its launch the document has been updated to reflect the changes to the scheme issued by central government. The project has worked with the Local Government Association and Chartered Institute 
of 
Public 
Finance 
and 
Accountancy to lobby central government on the content and methodology of the scheme.  The project has also kept officers informed of key changes that have been issued throughout the evolution of the scheme. 
All London boroughs have downloaded the toolkit, with over 400 requests from across England and Wales in total.  Feedback on the Guide and Toolkit has been excellent and the project is aware that London boroughs are using the toolkit in their CRC preparations. Two further CRC tools are planned for 2010/11 subject to available funding 

## 6. Ongoing Arrangements

The project has gone through a review process in the current stage of the project in order to plan the next stage.  A project initiation document has been produced and a project plan has also been developed, providing details of future arrangements. 

 
Looking forward to 2010-13 there are a number of requirements for London that the project will aim to address, discussed below. - 
The need to adopt a category management approach to energy procurement, improving supply 
chain management of current service providers (CPBs).   
o This will be delivered through LEP as a unified point of contact, aiming to ensure 
that CPBs deliver a high quality service.  To achieve this, LEP will need to educate CPBs to understand their roles as service providers rather than as "clients", which has historically been the case. 
- 
To ensure that customers improve their processes across procurement, energy management, 
invoice and payment processes and increasing electronic transaction, partly through the adoption of the new XML e-billing schema. 
- 
To continue to provide leadership and sector support on the CRC.  Additional toolkits are 
planned, for energy and finance activities, including best practice carbon trading. 
- 
To provide pan-London strategic approaches for energy demand reduction and public sector 
asset management.  Work is proposed to identify opportunities for capital investment and collaborative arrangements for technology implementation.   
- 
The need to provide a continued unified voice to central government, particularly at this time of 
budget pressure and introduction of new policies and regulations. 
- 
To provide proportionate and directed leadership, providing peer review and acting as a critical 
friend, to support boroughs make efficiencies and savings in a highly complex and challenging environment. Our aim is to extend the opportunity for savings and efficiencies that boroughs can achieve by 
adopting LEP's best practice recommendations to **£35m per annum** against CSR 2007 targets 
(see Appendix 2). 
The report resulting from the independent review into the project's effectiveness commissioned by Capital Ambition concluded that the project "delivers significant tangible benefits across London's Public Sector" (Review of London Energy Project, January 2010, PA Consulting Group).  The review by CIPFA commissioned by Capital Ambition noted that "This project appears to offer an excellent return for the investment made" (Review of CA14, London Energy Project, CIPFA). 

A long-term future for LEP is sought and the outcome of a Capital Ambition review in long-term hosting and funding options for the project is awaited. 

 

## 7. Sign-Off 8. Acknowledgements

 The LEP would like to acknowledge the participation of the following organisations in support of the project: 
LEP Project Board 
- 
Society of London Treasurers (represented by LB Bromley and LB Camden) 
- 
London Boroughs Energy Group (represented by LB Camden and LB Hackney) 
- 
London Contracts and Supplies Group (represented by LB Tower Hamlets) 
- 
Capital Ambition 
- 
Office of Government Commerce 
- 
London Universities Purchasing Consortium 
- 
Metropolitan Police Authority 
- 
London Fire and Emergency Planning Authority (represented by FireBuy) 
 
Pan Government Energy Project 
- 
Office of Government Commerce 
- 
Ministry of Defence 
- 
Department for Energy and Climate Change 
plus other Pan Government Energy Project participants. 
Strategic Partners 
- 
Chartered Institute of Public Finance Accountants 
- 
Local Government Association 
- 
GS1UK 
 
Suppliers 
- 
Buying Solutions 
- 
LASER 
 
External Consultants 
- 
Pulse 24 
- 
Rubus Consulting 
- 
PA Consulting 
 

## Appendix 1 - Borough Arrangements Contract Buying Arrangements Aug 2007

Smarter buying. Less carbon. A better deal.

## Confirmed Contract Buying Arrangements June 2010 Appendix 1 - Borough Arrangements Appendix 2 - Benefits Overview 2010/12 London Can Achieve Efficiencies And Savings Worth £35.7M* P.A.

LEP provides leadership and challenge across a range of procurement and transaction activities. 

It identifies new opportunities , builds strategic capability & implementation plans for best practice procurement & carbon  management.  
LEP's common sector approach is a proven route to achieving excellence and value for money.  

## Lep Improvement And Efficiency Role 2010/12 Strategic Development           Improvement Tools Pan-London Benefits Available Estimated Savings Per Year

Best practice procurement
Sustainability & carbon

## Process Efficiency & Improvement

*Against CSR 07 targets Borough action needed to secure available savings

Best practice procurement
- Use recommended aggregated, risk 
managed, flexible contracts
- Identify & move sites on to corporate 
- Monitor the performance of CPBs, 
utility suppliers and your own operations
- Report problems & opportunities to 
LEP for pan-London benefit
borough level recommendations
programmed routes to best practice in energy management, payment practice & CRC
Influencing policy development
Sustainability & Carbon
- Treat energy efficiency & carbon 
reduction as a corporate issue
- Minimise risks & adopt LEP's carbon 
trading recommendations
- Follow proven best practice, reduce 
consultancy requirement & use our CRC tools & audit scheme

## Collaboration, Knowledge-

Process efficiency & improvement
- Reduce paper bills, individual site 
payments and associated costs
- Adopt consolidated electronic bill 
validation standards to eliminate erroneous invoices
- Streamline energy and financial 
management systems & process
- Training, events & focus groups - Factsheets, guides, bulletins & 
newsletters
- Change management support & 
individual borough capacity-
Strategic planning
- Align energy management to other 
corporate priorities and efficiencies
- Use our Self-Assessment Action Plan 
& efficiency programme
- Act swiftly on non-compliance - Ensure LEP represents your interests 
with industry & government initiatives

## Appendix 3 - Event Feedback

 Examples of feedback received from events held in Phase III are detailed below. 
 
Bureaus, billing and e-issues workshop, January 2009: 32 feedback forms returned 
Do you expect to make use of the information shared at this session? Yes: 29 Partly: 2 Possibly: 1 Energy management and administration best practice, April 2009: 15 feedback forms returned 
Do you expect to make use of the information shared at this session? Yes: 15 
CRC Festive Cheer, December 2009: 24 feedback forms returned 
Do you expect to make use of the information shared at this session? Yes: 21 Partly: 3 Some quotes from delegates at our workshops: − 
"What an excellent event yesterday. It was really well attended and you had an excellent range 
of speakers." 
− 
"Exceeded my expectations, most informative so far!" 
− 
"Very much focused on local authorities, which was very good" 
− 
"Excellent presentations, lots of really useful information and practical guidance 
− 
"Once again a very useful seminar, very well organised and presented. As always, thought 
provoking and informative." 
− 
"Very useful and informative - particularly on updates/changes to CRC requirements" 

## Appendix 4 - Stakeholder Map

CPB Flex Contract Savings for London 
 
1.1 Total Savings 
Using the current Pan-Government Energy Project (PGEP) approved savings methodologies, against the *incomplete volumes of energy consumed - the total combined savings for Laser and Buying Solutions customers for April 2009-March 2010 are: Laser 
£14,095,434 
Buying Solutions 
£2,372,166.45 
GRAND TOTAL 
£16,467,579.45 

 1.2 The savings figure is based on the volumes of electricity and gas that London boroughs consumed through LASER and Buying Solutions compliant contracts, within full or part year 2009/10 (dependent on the date they joined the compliant arrangements).  *The figures do not include benefits generated by LB Greenwich and Southwark, as these have not delegated authority to LEP to receive and/or analyse their data. (The figures are based against 2007 CSR targets.) 1.3 Provisional estimates for savings of up to £15.82 million were anticipated, although this was dependent on the volumes boroughs were committing to the new flex contracts, which was unknown. (see CIPFA review information) 1.4 This current savings methodolgies suggest an average of: 
ƒ 
3.0% through aggregation - reduced supplier margin and cost to serve,  
ƒ 
0.5% by switching from fixed to flex - reduced supplier risk premium and 
4.7%* commodity price savings against the market average. (*An average of 6.5% was achieved in 2008/9.) 
2.1 LASER 
Savings of £14,095,434 have been delivered and are calculated using approved PGEP factors for the actual volumes of electricity and gas consumed under Purchase In Advance (PIA) and Purchase Within Period (PWP) contracts 2009/10 financial year. Four factors have been used PIA Gas, PIA electricity, PWP Gas and PWP electricity. 

Volume Saving 

| Electricity    | 269,673,729 kWh    | £5,313,467.00    |
|----------------|--------------------|------------------|
| Gas            | 1,098,745,940 kWh  | £8,781,967.01    |
| TOTAL          | 1,368,419,669 kWh  | £14,095,434      |

 
2.2 LASER Savings Breakdown 
 
a. This figure does not represent the full savings, as all Southwark and 
Greenwich volumes are excluded. 
b. Savings are derived from electricity contracts for 17 boroughs and gas 
contracts 14 boroughs.   
c. Of these contracts 14 boroughs began electricity contracts mid-way through 
the year and 7 boroughs began gas contracts mid-way through the year, i.e. the savings figures do not cover an entire year volume for many boroughs. 
 
d. LASER still provides fixed term, fixed price contracts, which are not included 
in any savings figures.  These accounted for 145million kWh of electricity and 627million kWh of gas, which could provide further savings through switching to flexible, aggregated, risk managed contracts. 
3.1 Buying Solutions  
Savings of £2,372,166 have been delivered and are calculated using approved PGEP factors for the actual volumes of electricity and gas consumed under Flexible locked contracts 2009/10 financial year. Three factors have been used Flexible locked Gas, Flexible locked Non-Half Hourly 
electricity, Flexible locked Half Hourly electricity,. 
Volume 
Saving 

| Electricity    | 227,287,008 kWh    | £1,984,360.14    |
|----------------|--------------------|------------------|
| Gas            | 380,022,871 kWh    | £384,975.00      |
| TOTAL          | 608,436,034 kWh    | £2,372,166       |

 
3.2 **Buying Solutions Savings Breakdown** Savings are derived from electricity contracts for 7 boroughs and Transport for London and gas contracts for 5 boroughs. 
a. The London Borough of Southwark has moved some large gas supply to 
flexible contracts from April 2010.   
b. The Royal Borough of Kensington and Chelsea and the Metropolitan Police 
will begin contracts in April 2011.   
c. London boroughs of Lambeth and Lewisham have October 2010 start for gas 
and electricity and London Borough of Tower Hamlets gas only. 
4.1 **Future Savings Challenges**  
ƒ 
Deliver savings against new baselines established for 2009/10, which will be 
a real challenge given this was a year when energy prices were very low and supplier margins already substantially reduced through aggregation. 
ƒ 
Ensure that compliance criteria and savings methodologies for buying 
organisations are robust, transparent, accurate and appropriately provided to Capital Ambition and London customers 
ƒ 
Identify new savings opportunities, such as power purchase agreements, 
renewable heat incentives and feed-in tariffs 
CIPFA Review - Energy Procurement Procurement savings information provided to CIPFA for Capital Ambition Review: 
1. 25 boroughs now use aggregated, flexible, risk managed contracts.  The 
OGC estimates cost savings of 8.7% can be achieved from switching to flexible and risk managed procurement, through aggregation, risk premium avoidance and flexible commodity procurement.  The energy costs across London are approximately £300m.  However, most boroughs have sites that are not using these contracts, e.g. schools.  If an assumption is made that the costs can be divided equally between boroughs, the total for the 25 boroughs would be £300m / 33 x 25 x 80% = £182m. 2. On average 20% of each borough's expenditure is not using the compliant 
contracts, by moving 10% of each of the 25 boroughs portfolio onto compliant contracts  a further £1.97m could be realised. 
 
3. Power purchase agreements will present an opportunity for further savings 
and longer-term budget stability, if the remaining 10% of 25 boroughs were to enter PPA, this presents a further £1.977m. 
a. The current identified saving opportunity is 8.7% x £182m = 
£15.82m. 
b. POTENTIAL - All borough adoption for all sites would be 8.7% x 
£300m - £26.1m 
c. Detail for 2009-10 financial year will be provided after May 2010, (NB. 
Not all of the 25 boroughs will have had a full year of flexible purchasing, so full benefits may not be accrued until financial year 2010-11) 
 
4. Further costs will be saved in avoidance of OJEU tender processes to 
procure energy - These are not quantified and are dependent on the internal processes of each organisation. 5. Staff time saved on procurement activity and internal decision making 
processes - If an estimated 5% FTE per organisation is assumed, e.g. this equates to 5% x 33 x £60k (energy manager salary, incl. on-costs)  
a. £99k cost saving across all boroughs 
 

TOTAL Savings Potential circa £35.7m per annum (provisional estimated savings achieved by authorities and based on CSR 07 
targets)

## Draft Unconfirmed

| Workstream                                                | Objective                      |
|-----------------------------------------------------------|--------------------------------|
| Best practice                                             |                                |
| procurement                                               |                                |
| Estimated                                                 |                                |
| savings £25m                                              |                                |
| p.a. Pan-                                                 |                                |
| London                                                    |                                |
| Ensuring buying                                           |                                |
| organisations continuously                                |                                |
| improve their buying                                      |                                |
| performance and                                           |                                |
| customer service                                          |                                |
| Produce revised Specification of Requirements for Central |                                |
| Purchasing Bodies (CPB)                                   |                                |
| Cashable financial savings                                |                                |
| through reduced energy costs                              |                                |
| Qualitative improvements in                               |                                |
| customer service                                          |                                |
| Forecast savings £17.72m                                  |                                |
| Move all London boroughs and all sites                    |                                |
| (where appropriate) to recommended                        |                                |
| contracts.                                                |                                |
| All borough all site adoption ~                           |                                |
| £26.1m.                                                   |                                |
| With                                                      |                                |
| total spend of £300m and an average of 80%*               |                                |
| spend on best practice contract, forecast                 |                                |
| savings are                                               | (£300m / 33 x 25 x 80% x 8.7%) |

- Ensure CPBs work towards meeting minimum service standards - Assess CPB compliance to statement of Requirements - Introduce key performance targets - Agree improvement plans with CPBs - Develop benefits methodology alongside OGC work - Measure buying performance of CPBs and calculate savings
£15.818m per annum for 25 authorities, rising to £17.716m for 28 authorities                           
Identify new strategies for achieving long-term best value from procurement

- Promote adoption/continued use of best practice procurement deals - Represent customer requirements (London focused) on OGC/CPB to develop Power Purchase Agreement supply 
arrangements - Develop approach to identify and move remaining off contract spend (e.g.. schools) - Support Pan-Govt work to develop new savings initiatives and benefits methodologies
Cashable financial savings through reduced energy costs Qualitative improvements in customer service                         
Forecast savings £4.4m Move 10% of each Borough's portfolio onto recommended contracts.  Additional savings of £1.977m (25 authorities) or £2.214m (28 authorities). Power Purchase Agreements offer potential for reduction in energy costs* and long-term budget stability. Transferring 10% of the 25 to 28 authorities' volumes to PPA provides potential annual savings of £2.200m Develop strategic supplier relationships through a unified point of contact to create pan-London value
- Hold discussions with suppliers to identify how customer best practice can generate supplier discounts - Work with authorities to eradicate costly practices - Quantify impact on costs and develop statements of potential savings Cashable financial savings through reduced supplier charges and energy costs.    
Forecast savings of *£225,000 
(10 beneficiaries) to be identified and validated with suppliers. 

Work with 2 suppliers to develop programme of initiatives that enable customers to benefit from discounts and lower energy costs.  Rollout to other strategic suppliers during 2011.  

Sustainability and Carbon       
Estimated savings £6.5m p.a. pan- London
Deliver resources that enable boroughs to comply with and succeed in the CRC scheme, and reduce energy consumption 
- Develop pan-London approaches for preparation and early years - Run awareness campaigns and provide training - Provide practical support and tools for CRC operations (Toolkits) - Build capacity within authorities to meet CRC administration and carbon management challenges
Demand reduction integrated with CRC planning Reduced carbon footprint and CRC liability Reduced risk of non-compliance with new legislation
30 boroughs to register and comply with CRC in 2010.                                                     
30 boroughs to use LEP's CRC module for energy management 25 boroughs to use LEP's CRC module for financial management Benefits are delivered through cost avoidance 
non-compliance) and reduction of consultancy requirement. Cashable savings are captured 
of low carbon technology options opportunities assessment for energy efficiency measures management programme to support borough adoption of energy/carbon reduction                                                          
In terms of future savings predictions, a number of assumptions have been made, which will undoubtedly change in 2010-12, i.e. the re-baselining of savings against 2009/10 (a very low commodity priced year), expected changes to the current savings methodologies, unlikely further savings potential across supplier margin and balancing fees.  This may be balanced by newly identified savings in other areas.
- Boroughs to report issues of concern / good practice and key service delivery 
improvements required to LEP - Boroughs to expect improved performance and transparency from service providers and utility suppliers and escalate 'non-compliant' behaviour                                         - Boroughs to adopt common specified standards as they are developed

* It is unclear how much volume (general fund) remains off-contract per authority.  There is considerable difference Pan-London in terms of % schools estate included in corporate contracts (variance  50 - 99%).                                                                                                   
All GLA functional bodies will migrate to best practice contracts, these savings are not included. 3.0% through aggregation - reduced supplier margin and cost to serve, 0.5% by switching from fixed to flex - reduced supplier risk premium and 4.7%* commodity price savings against the market average.  (An average of *6.5% was achieved in 2008/9.) 25 authorities have transitioned to new arrangements. 3 authorities will transfer during 2010. 

 - Boroughs to migrate and/or continue the use of "compliant" flexible contracts - Boroughs to cleanse their asset/energy and finance databases to identify sites that are not on "compliant" contracts - Boroughs to move non-"compliant" sites onto corporate "compliant" contracts   - Boroughs to ensure new buildings and meters are added to "compliant contracts - Boroughs to encourage schools use of "compliant" contracts - Boroughs to commence use of new opportunities as they arise, PPA, FITs, RHIs
*PPA savings are yet to be defined, the figure used is an estimation. On average, 20% of each Borough's spend is off contract, i.e. some boroughs have majority sites using corporate contracts, others have higher volumes, particularly in schools. Recent evidence shows gas contract rates of 1.6p p/kwh, compared to a deemed (off-contract) rate of 5p/pkwh.

- Boroughs to identify and inform LEP of areas where supplier improvements could reduce administration and/or risk - Boroughs to implement recommended improvements, where suppliers offer discounts, e.g. early payment, direct debit - Boroughs to adopt improved standards that suppliers can pass through savings, such as AMR, self reads, consolidated payments Some suppliers have indicated discounts for accurate (AMR) data & consolidated, electronic 
& prompt payment.  Actual amounts to be negotiated.  £300m/33=£9.09m x .25% ~ £22.5k x Buying Solutions customers (8 boroughs + GLA group).  The LASER business model currently does not lend itself to pass-through supplier discounts, opportunities to be established. Free consultancy and other value added services such as meter exchanges have been offered by suppliers.

- Boroughs to make full use of LEP's CRC tools and training and reduce consultancy requirements 

Opportunities to effectively manage the costs and risks associated with CRC Regulations, such as forecasting carbon emissions, efficient use of AMR, best practice management arrangements for corporate estate, understanding accountancy practice, recharging and allocation of CRC bonus and penalties.                                       Through use of LEP's suite of guides and tools, able to reduce consultancy input.

Process efficiency and improvement     
Estimated savings £3.7m p.a. pan- London
Maximise cost recovery from erroneous invoicing through best practice bill validation and energy management data use
- Produce best practice methodology for bill validation - Develop savings methodology - Work with providers towards meeting minimum service standards and Introduce key performance targets - Specify pan-London common report formats
Bureau services available via approved solutions In-house borough adoption of bill validation standards Cost recoveries from erroneous invoicing 1% of value.                  
Forecast savings of £3m
10 boroughs to adopt best practice bill validation practice.  A 1% reduction in energy 
charges produces forecast cashable savings of £3m.  Additionally, borough 
activities such as changes to profile class, reduction in MD/KVA/AQ/SOQ and charges circa *£30k per borough
Improve data quality and management information from suppliers and service providers to manage CRC and consumption risks
- Hold supplier management meetings to identify best practice and improvement opportunities - Develop common standards, service levels and reports (utility and Automated Meter Reading (AMR) suppliers, buying organisations and bureau services)
Carbon and financial savings through demand reduction Better management of CRC risks by improved accuracy of consumption records
Key enabler for borough adoption of energy management and payment actions
Reduce costs by implementing the optimum approach to processing and paying high volumes 
of energy invoices
- Complete global standard XML billing schema design - Develop the business case and implementation plan for adopting consolidated electronic invoices and payment  by authorities
- Develop implementation strategy for XML schema adoption

Cashable financial savings through reduced payment and administration process costs Improved financial management Forecast savings are £697k pan-London p.a.

New electronic billing standards to be rolled out from April 2011. Current processes requiring mapping before savings can be confirmed.                                                          
5 boroughs to implement full automated consolidated electronic energy management, invoice processing and payment.

Improvement planning (Programmed benefits realisation)        
Estimated value £0.5m pan-London
Realise benefits and assess borough energy management effectiveness and routes to excellence through a self-assessment and improvement plan
- Revise self assessment improvement action plan to support boroughs benefits realisation (covering gas, electric, asset, data and energy management, governance, payment practice) - Support authorities to complete self assessment process - Use findings to develop case studies and business case to encourage Pan-London improvements, efficiency gains and savings - Support authorities in defending claims from suppliers to recover debt where insufficient supporting information is provided - Support adoption of direct debit and shorter payment terms
Benefits realisation enabled for cashable savings and efficiency gains Managed risks and costs of compliance and new regulations Accelerated culture change, increased capability and efficient work practice within boroughs
Key enabler to map borough performance and support the implementation and adoption of improvement and efficiency activities.               

borough based audit to support borough understanding of their readiness for CRC and identify effective pan- London carbon management opportunities ensuring pan-London needs are recognised 

- boroughs to introduce bureau style bill validation processes - boroughs to make checks on charges such as KVA and ask suppliers for cost reduction where appropriate - boroughs to record savings and report to LEP

£30k is based on other borough experience of implementing KVA reduction (£30k x 33 = 
£990k)                                                                                                                                       
Bill validation, up to £3m Pan-London cost recovery could be achieved Additional activities, such as meter reading show net gains of approx £90k per borough 
(£90k x 33 = £2.97m)                                                                                                   Current processes require mapping before savings can be confirmed.

- Boroughs to introduce consolidated billing systems and links to financial management systems -boroughs to move from paper-based, site based, or manual bill/data entry to consolidated and automatic processing boroughs to introduce early payment and/or direct debit payments to receive supplier discounts Many boroughs have a mixture of cheque and BACS payments and a mixture of consolidated billing combined with large numbers of 'non-compliant-contract' or individual site level paper bills.  The current methods of invoice processing and payment practice pan-London will require mapping. POTENTIALS Savings on BACS over cheques will be seen.  Cheques cost approximately £3 to process against 10 pence for BACS. Assuming each authority has 300 cheque payments (e.g. schools and other sites) 33 x 300 x £3 = £29,700. POTENTIALS Accounts Payable charges are approximately £2.75 per invoice.  (taken from CIPFA benchmarking club) If the number of invoices reduces from an assumed maximum p/a 15,000 individual payments to 48 (4 consolidated invoices per month) the maximum saving is (15000 - 48) x £2.75 = £41,118 per borough.  Assume boroughs can achieve 20% savings (an average mixture of best total consolidated and minimal practice) 33 x £41,118 x 20% = £271,378                                                                             
Where manual data entry from invoice processing into either an accounts payable or energy managem to invest directly in a bespoke improvement strategy. This facility is estimated to save £0.5m pan London.

Subject:  
Carbon Reduction Commitment - Pan-London Review  
Michael Wood - Programme Director 
Report by: 
Agenda item: 9 
michael.wood@haringey.gov.uk 
Strategic Theme: 
Energy efficiency Pan-London opportunities, Carbon Reduction Commitment cost avoidance 

 
Purpose:  This report is intended to provide the Board with: 
ƒ 
Sufficient evidence to authorise a Carbon Reduction Commitment peer review 
(Healthcheck) service to ensure individual boroughs comply with scheme and avoid costs / inefficiencies 
ƒ 
Sufficient evidence to approve a  Pan-London review of energy efficiency measures 
and opportunities assessment of further potential savings and benefits 
ƒ 
The need for LEP to lead in this new area and support best practice within boroughs 
ƒ 
Sufficient evidence to authorise project costs.  This is made up from LEP keeping 
£27k income generated in 2009/10 from licensing the first CRC module to all RIEPs and HE sector and the Board authorising the release of an additional £20k. 
 

 
Financial implications: 
 
Budget issues outlined in further detail at Appendix 1 
 
Financial 
 Year 
Existing 
Project  
Allocation 
£ 
Committed 
to date 
 
£ 
Spend to 
date 
 
£ 
Balance 
£ 
 Funding/ 
Additional 
Funding Request 
£ 
Total 
Existing 
Funding  +  
New 
Funding 
Request if 
applicable 
2010/11 
**221,715.33 
£178,000
£19,333.22
£24,382
£20,000 
£241,715.33


Total 

** This figure includes £27k income generated from distribution of CRC support to RIEP network, which has not been returned to Capital Ambition. Please also note, that two further planned CRC toolkits are currently unfunded due to uncertainty of funding from the wider RIEP network (outlined as Appendix B) 
 
Executive summary:  
All London boroughs will qualify for the CRC Energy Efficiency Scheme, and it is expected that most councils will pay an average of £500,000 in April 2011 and 2012 for fixed cost allowances at £12 per tonne in the introductory phase.  After this period the costs are harder to predict due to the introduction of a full cap and trade scheme. Stakeholder consultation conducted in July 2010, demonstrated that many authorities still lack the practical experience necessary to confidently comply with the initial stages: only 
30% felt confident they had sufficient data to comply with the September 2010 registration deadline, 30% felt they could forecast their carbon emissions, 20% believed they had sufficient budget committed to register and purchase allowances, 50% believed executive teams understood their role within CRC. To fill this gap, LEP has developed a process to independently peer review individual organisation's CRC preparations, help ensure compliance, mitigate risks and recommend improvements, 90% of borough energy managers felt they required this support. To maximise the value of the 'Healthcheck', an assessment of the efficacy of current energy efficiency measures will be conducted, identifying best practice and opportunities for Pan- London savings and capital investment. The individual reviews will be aggregated to deliver a Pan-London report on London's preparedness for CRC, the current energy performance of London's public buildings and an analysis of the efficiency measures that could most improve energy efficiency. It will also provide a picture of the DEC and EPC ratings achieved by London.  Borough level information will be analysed across energy efficiency actions already implemented; their outcomes, including carbon and cashable savings plus; future actions planned and; barriers to change. Overall, the aim is to establish those projects delivering the best results and to share the combined experience of boroughs. In reality, the measures available to improve energy efficiency and deliver cash savings are likely to be similar across a wide range of building types.  By using this data, London has an objective method of assessing available opportunities as well as assessing and targeting those measures that can be most cost effectively employed, especially when comparing the list of needs to the results obtained from actual borough projects already undertaken.  This analysis should highlight the potential for future capital investment, collaborative procurement and probably lead to the development of other LEP/CA projects, which will accelerate change Pan-London and the potential to realise further savings, including newer opportunities, such as Feed In Tariffs (FITs). At borough level, the aim of the CRC Health Check Service is to mitigate the costs, penalties and other risks associated with the new CRC Energy Efficiency Scheme prior to registration and to support borough compliance through an independent Red Amber Green 
(RAG) based assessment of preparation, future planning and operations conducted to date. A bespoke report summarising the findings and highlighting any errors, omissions or areas of non-compliance will be delivered to the borough during a face-to-face meeting. As the CRC is more than a compliance exercise, the proposed CRC Health Check will additionally review an organisation's preparation for managing its obligations under CRC and where necessary suggest areas for improvement to support senior management team decision making and resource allocation. The Health Check will be conducted by an independent specialist using an LEP approved format.  The assessment process includes telephone interviews with relevant officers and managers, a borough questionnaire, a self-assessment across a range of CRC activities and the provision of energy management data.  The consultant will conduct a desktop review of the information returned and gathered during interviews to ensure that the borough's assessment of qualification is correct and that the information collated for registration complies with the regulations and that their preparations for ongoing CRC management and energy reduction are adequate. Where good practice is observed this will be transferred to other boroughs to enable effective and efficient management. 

 
Project Outcome (s): 
 
- 
The risks and costs of non-compliance Pan-London will be managed through a 
consistent risk-based assessment of borough CRC preparation and energy 
efficiency measures. 
- 
Capital Ambition will receive a clearer picture of the types of energy efficiency 
measures that have been implemented, the benefits realised by organisations, 
barriers to implementation and the integration of energy efficiency performance in 
asset management. 
- 
Use of resources will be improved through analysis of actual projects and their actual 
outcomes, and subsequent recommendations for common improvement and savings 
opportunities, including Pan-London collaborative procurement of solutions. 
 
Key Risks:  
ƒ 
Insufficient take-up at individual borough level, if the service is not free* at point of 
delivery, leaving risk exposure to boroughs and insufficient data to provide a representative sample for pan-London review 
ƒ 
Delay to service delivery, registration is due to be completed by 30 September 2010 
ƒ 
Possibility of further last-minute changes to the scheme under the new 
administration 
 
Recommendation: 
That the Board: 
(i) 
Approves the retention of the £27k income generated to part-fund this project 
and release an additional £20k to fully cover the costs of the Health check and Pan-London review; and 
(ii) 
Promotes take-up of the Health check service through Society of London 
Treasurers and London Environment Directors Network. Appendices: 
Appendix A:  
Budget Issues 
Appendix B: 
Planned CRC Support tools 
Appendix C:  
PID 
 
Background papers: None 
 

TOTAL C/F from 2009/10 
£72,715.33
2010/11 funding 
£149,000.00
TOTAL for 2010/11 
£221,715.33


2010/11 Spend  
 
April 
£9,603.03
May 
£9,730.19
 
 
Total 
£19,333.22
Amount remaining 
£202,382.11 
June 2010 onward commitments 
 
Staff 
£100,000.00 
Communications 
£10,000.00 
Events, workshops, knowledge transfer 
£18,000.00 
legal  
£5,000.00 
Operating general 
£3,000.00 
Misc expenses and project costs 
£2,000.00 
Self-Assessment Improvement Plan 
£40,000.00 
 
£178,000.00 
At risk projects 
 
CRC Finance module (CIPFA) 
£26,200.00 
CRC Toolkit module 2 
£24,000.00 
CRC/Pan-London review 
£47,700.00 
 
£97,900.00 
 
 
Required project budget 
£275,900.00 
 
 
Assumptions 
 
Request addn £20k for Pan-London review 
£20,000.00 
Income from RIEPs £60k 
£48,000.00 
Amount remaining 
£202,382.11 
Projected Operating budget 
£270,382.11 

## Crc Toolkit Module 2 - A Local Authority Guide To Managing The Introductory Phase

The principal focus of this module is to support early years participation and is aimed like the first guide, at those who have direct responsibility for managing the CRC scheme.  It aims to identify and mitigate the risks and costs associated with the early years of the CRC scheme and ensure current users can continue approaching the CRC in a systematic best practice manner, sharing tools and techniques across the local government, police, fire and higher education sectors. It is designed to support CRC participants to manage their ongoing obligations and prepare for forecasting and managing emissions in the three year introductory phase. In addition, the new module will also incorporate an audit process to allow assessment of an individual organisation's CRC management. Adding to the existing CRC Toolkit and Guide this new module delivers guidance, further tools and checklists to support organisations in managing their obligations through the early years of the scheme's introduction. As a minimum we will deliver the following elements  

1. A best practice manual based on the existing format provisionally entitled 
"CRC Energy Efficiency Scheme - A Local Authority Guide to managing the Introductory Phase" 
2. Outlines of potentials costs, liabilities and risks to boroughs, based on example 
scenarios 
3. Compliance and best practice checklist 4. Example procedures and business cases for the adoption of each early action 
metric;  
5. a strategy for the installation and effective use of Automated Meter Reading 
(AMR), including cost recovery of supplier pass-though costs, etc 
6. recommended best practice methods to forecast emissions, dependent on data 
sources and quality 
7. straightforward best practice methods of and LA feedback from managing the 
registration, carbon footprint, annual reporting processes and carbon and risk management planning (strategic and corporate issues) 
8. outline other LA experiences in managing the complex portfolio and 
legal/ownership issues from gathering the necessary data for carbon footprint, annual reports and the collation of an compliant evidence pack 
9. simple methods of determining and explaining carbon abatement costs 10. template reports, presentations  and business cases for internal and external key 
stakeholders and decision makers 

## Crc Module 3 - A Local Authority Guide To Managing Finance, Risk And Carbon Trading

The principal focus of this module, which is delivered through a partnering arrangement with CIPFA is to provide finance and CRC managers with a clearer understanding of the financial activities related to CRC accounting practices, carbon allowances and CRC bonuses and penalties. To improve effective and efficient planning, decision making and risk/cost reduction, best practice methodologies for the redistribution of funds within the scheme, including reallocating funds within the schools estate, general management and technical accountancy practices will be developed To increase the prospects of benefiting from carbon trading, recommendations based on a strategic evidence based evaluation of the financial aspects of the CRC, risk assessment of carbon trading strategies and/or models including legal implications, analysis of the potential to act in groups or outsourced trading will be provided. Resources to provide public sector CRC participants with appropriate guidance, models and tools will include: 

1. A best practice manual provisionally entitled "CRC Energy Efficiency Scheme - A 
Local Authority Guide to managing finance, risk and carbon trading" 
2. effective and efficient solutions for managing costs and risks associated with CRC 
carbon trading 
3. clarity on accepted accounting practice and describe best practice approaches to 
accounting and reporting for CRC 
4. example methodologies and tools for redistributing CRC bonuses and penalties, 
corporately and within the schools estate 
5. an evaluation of carbon trading approaches and strategies and an assessment of 
the risk / legal aspects associated with trading (derivatives, swaps and ultra vires assessment) 
6. options in respect of pan-sector CRC carbon trading 
Two free workshops will be delivered by CIPFA for London boroughs. 

 

## Carbon Reduction Commitment - Pan-London Review Of Strategy And Operations Please  Note:  Capital Ambition Does Not Support Projects That Benefit Single Authorities. Proposals Should Usually Be Joint Submissions Or Be Submitted By A Lead Partner On Behalf Of Others. In Exceptional Circumstances Capital Ambition May Support A Bid But It Must Demonstrate Specifically The Value Of Outcomes And Learning And How It Can Then Be Transferred To Other Organisations.

Reasons for/Summary of Changes 
2010 

                                                  Template version 4.0 

Is this a Feasibility/Research 
Planned Start date: 
July 2010 
Amount of Funding  
Length of Project/ Feasibility or 
Research Study: 
4 months 

## 1. Background/Context

The CRC Energy Efficiency Scheme (CRC) is an obligatory emissions trading scheme covering non-energy intensive users in both public and private sectors, and is a central part of the UK's strategy to deliver the emission reduction targets set in the Climate Change Act 2008.  All London boroughs will qualify for the scheme, and it is expected that most councils will pay an average of £500,000 in April 2011 and 2012 for fixed cost allowances at £12 per tonne in the 

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Request Year 1 
 
£47,760k (Additional £20k).  LEP 
has £27k, derived from the  RIEP network for the provision on CRC toolkit, module 1 
Capital 
Request Year 2 (if applicable) Total Funding Requested 
£20k 

introductory phase.  After this period the costs are harder to predict due to the introduction of a full cap and trade scheme.  However, findings from "trial schemes" indicate this may increase to £18 upwards per tonne. In addition, the CRC requires a number of obligations to be met, the first of which centres on the need to register for the scheme and to provide information to the Environment Agency in an accurate and timely manner. Failure to do so can result in substantial fines which, in the worst case could amount to over 
£1,000,000, although the initial fine for failing to register is more typically c.£15,000. The need for accurate and compliant information is therefore essential. The London Energy Project has successfully delivered its CRC Toolkit and disseminated best practice advice, however many authorities still lack the practical experience necessary to confidently comply with the initial stages, such as registration.  In addition, boroughs report there is a real need to ensure that their organisations look beyond the initial compliance requirements and are well prepared to manage their CRC obligations moving forward. This is of particular importance as good consumption forecasting and a trading strategy will be needed to mitigate the risks. 

## Stakeholder Consultation Of London'S Energy Managers Confirmed:

30% felt confident they had sufficient data to register, 30% felt they could forecast their carbon emissions, 20% believed they had sufficient budget to register and purchase allowances, 50% believed executive teams understood their role within CRC.  90% felt they required the support outlined by LEP in order to comply with and effectively manage the risks and costs of the scheme.  
Borough based independent review, risk assessment and improvement actions.   The principal focus of this project is therefore, to identify and mitigate the risks and costs associated with the initial registration and compliance requirements. Thereafter a CRC Health Check service will be offered to each organisation. This would assesses the organisation's state of preparedness and review the information planned for submission during their registration with the Environment Agency. A report will be provided to the organisation highlighting any areas of non-compliance, grading their preparations on a 'red', 'amber', 'green' basis, highlighting risks, cost and opportunities and recommending improvement actions, which senior management teams can use for resource allocations.  
 
Process for collecting baseline information, opportunities assessment and strategy for implementing carbon efficiencies Pan-London.  The CRC 
Health Check provides Capital Ambition an opportunity to better understand London's current position in terms of property and asset management, i.e. the energy efficiency measures already implemented and/or planned by organisations, their overall effectiveness and the quantifiable results in terms of both cashable and non-cashable savings. This will allow an assessment of potential opportunities for improved efficiency to be undertaken on a London wide basis. 

Barriers can be identified, best practice can be shared and, where appropriate we can work with the buying organisations to help specify frameworks to allow for the easier implementation of technologies that have a proven track record. This part of the project will therefore deliver a report containing the average Energy Performance Certificate (EPC) and Display Energy Certificate (DEC) ratings and their Top 10 recommended improvement actions, current borough activity identified as best practice and measures of success, common themes and opportunities and routes to their implementation, the priority London's property professionals place on energy efficiency and cashable and carbon benefits.  Boroughs waiting to roll-out more innovative projects and planning to benefit from Feed in Tariffs (FIT) and Renewable Heat Incentive (RHI) will be identified. 

 

2. Project Information  
No. 
Description 
 
2.1 
What is the aim of the project? 
To independently review individual organisation's CRC preparations, help ensure compliance, 
mitigate risk and recommend improvements.   
(30 words or less)  
The aim should clearly state the changes you 
To assess the efficacy of current energy efficiency measures, share best practice and identify Pan-London opportunities.  
hope to achieve as a result of your work. 
2.2 
What are the (measurable) objectives of 
To help boroughs ensure costs, risks and opportunities are effectively managed To ensure immediate compliance with the CRC Energy Efficiency Scheme To assess and report the preparedness of an organisation and suggest areas of improvement   
To assess and describe the current energy efficiency position Pan-London, analyse energy 
efficiency measures adopted by organisations to date and to deliver a report to aid the future direction of energy efficiency planning, including savings potentials.  
the project? Objectives should clearly outline the activities you will undertake and the services you will offer to deliver the aim.  Each objective should be a 
one sentence statement, or a number of statements starting with the word 'to'. 

Delivering Together: 
ƒ 
The review, risk analysis and mitigation measures will be available for all 33 London 
boroughs, LFB and Met police 
ƒ 
The common review and risk assessment will recommend common best practice solutions 
that can be adopted by all, ensuring efficient shared learning and a collaborative approach 
ƒ 
Potential solutions and energy efficiency measures may be shared across all boroughs 
(dependent of the findings) 
ƒ 
The Pan-London assessment of energy efficiency opportunities will contribute to 
improvement against NI 185 and N179 (collaborative procurement and VFM) 
ƒ 
An opportunity to consider energy efficiency in a programmed manner across property and 
estate management, including newer opportunities, such as FITs and RHIs. 

2.3 
How does the proposed project address one (or more) of Capital Ambition's themes and funding priorities?  
Capital Ambition themes-Connected London, Delivering Together, Raising the Bar and Developing Capability and priorities set out in CSR 2007, Local Area Agreements, National 

Indicator 179 and National Improvement and Efficiency Strategy themes of innovation, Empowerment, Economic Renewal and Value for Money. 

2. Project Information  
No. 
Description 
 
Opportunities for effective management of risk circa +/- £10-15 million 
Opportunities to benefit financially from competent management of the CRC scheme 
Risk avoidance / cost - compliance, reputation, challenge from stakeholders 
ƒ 
Manage the risks, costs and lost opportunities associated by councils inability to develop 
and execute a carbon forecasting strategy, incurring greater cost and pan-London liability 
ƒ 
Managing the risks and costs if London Boroughs do not comply with the regulations. 
ƒ 
More efficient use of resources, from assessing risks and opportunities, aiding compliance 
and costs of non-compliance, accelerating necessary change within borough and identifying 
Pan-London opportunity. 
ƒ 
A clearer position of energy performance across London's assets through reviewing EPC 
and DEC ratings and their recommendations for improved energy efficiency  
ƒ 
More efficient use of resources and carbon reduction through the effective application of 
AMR.  
ƒ 
Capacity Building - ensuring officers have the necessary tools and process to comply and 
effectively manage the CRC scheme, integrate energy efficiency with corporate 
governance, property and estate management. 

## 2.4 What Benefits Are Sought From Running This Project?

 Be specific in terms cash savings (what, how much over what period?), efficiency gains (how, impact?), Cost avoidance (what, how much over what period?) and Capacity Building.  These headings not exhaustive and additional headings 
can be added where necessary 

We require clear information about projected return on investment for projects that claim to deliver efficiency savings.  Please use mietool (or a robust equivalent) to support your savings estimates.  If you do not have any mietool trained staff please see the following website for further details  http://www.londoncouncils.gov.uk/capitalambition/resourcesandperformance/bpcasestudies/mietool.htm 

 

## 2.5 Are There Any Partners Involved In The Project?  If So, How Will They Contribute To Its Success?

 
The Environment Agency will provide regulatory support and guidance.   
Please list names and roles of any partner 

organisation involved in the *delivery* of this 
project.   

                                                  Template version 4.0 

2. Project Information  
No. 
Description 
 
Each borough will receive a consistent risk-based assessment of its CRC preparation and energy 
efficiency measures, with recommended improvement actions, i.e. the risks and costs of noncompliance Pan-London will be managed. Capital Ambition will receive a clearer picture of the types of energy efficiency measures that have been implemented, the benefits realised by organisations, barriers to implementation and Pan- London opportunities, including collaborative procurement of solutions. The review will establish a clearer picture of how energy efficiency measures are integrated into corporate governance, property and asset management. 
ƒ 
London boroughs will have a clearer understanding of their CRC compliance risks through 
an independent RAG assessment 
ƒ 
London boroughs will receive a report enabling them manage and comply with regulations 
and avoid the risks of fines associated with the scheme 
ƒ 
Use of resources will be improved through following expert guidance on necessary 
improvement actions 
ƒ 
Pan-London overview of energy efficiency measures implemented, asset performance and 
common opportunities for improvement and savings.  
2.6 
What are the outcomes of the project? When considering intended outcomes, you need to ask the question 'What changes or effects should come about as a result of the project?' 
 
2.7 
What outputs will the project deliver and 
1. A template for assessing compliance with the CRC and the overall preparedness of an 
organisation  
how will you ensure that they are fit for 
purpose? 
2. A bespoke report for each participating organisation that highlights areas of non-compliance 
grades their CRC preparation, recommends necessary actions. Individual presentation of this report to each organisation. 
Outputs are tangible things (sometimes called 'deliverables') that are to be delivered by the project e.g. toolkit, procedure manual, training strategy.  
3. An assessment of energy efficiency measures implemented across London, a report 
presenting the findings and recommendations for future Pan-London support or programmes. 


                                                 Template version 4.0 

2. Project Information  
No. 
Description 
 
2.8 
What are the key risks (barriers to success) of 
 
this project and how will you minimise the 
1. The principal risk is the failure of boroughs and other stakeholders to participate in an open 
and willing manner. (Impact medium, probability low). 
2. Additionally, boroughs may not act on recommendations around compliance or necessary 
improvement actions.   (Impact high, probability low). 
3. A secondary risk is the failure of the Environment Agency to provide sufficient cooperation 
when needed. (Impact medium, probability medium) 
 
These risks can be managed through clear communication and input from senior contacts as necessary. Feedback from other CRC work undertaken by LEP is high and we therefore expect 
good cooperation. 
impact of them?  
Key risks should be identified and graded according to likelihood of occurring (Probability) 
and seriousness (Impact). 
2.9 
How will the project be resourced? 
Is the project being conducted within existing 
External consultancy. Project management through LEP. Working groups as required (principally, London borough energy and finance managers). 
operational resources or have specific funds been allocated?  Please include internal, external, consultants and/or working groups. 
2.10 
What are the project reporting arrangements?  
As a minimum, a monthly highlight report should 
The progress of this project will be reported within the main London Energy Project highlight report. 
 
be completed and sent to the Capital Ambition Programme Management Office using the 
Capital Ambition Highlight Report template. 
2.11 
How will the success of the project be 
Number of boroughs using the CRC Health Check service, the number of internal non-compliance issues raised and the number indicated by Environment Agency audit. The Pan-London overview of energy efficiency measures undertaken, the benefits realised and the barriers and opportunities Pan-London moving forward. 
 
measured?  
Each measure should be linked to one or more target outcomes. 

                                                  Template version 4.0 

2. Project Information  
No. 
Description 
 
2.12 
How will you measure the Equalities Impact 
of the project?  
 
None are anticipated as a result of this project. 
You should carry out a relevance assessment before submitting this proposal.  Any adverse impacts identified should be outlined in the 
proposal along with mitigating actions. 
2.13 
What will be the legacy of the project? 
Ongoing management of risks and costs associated with CRC scheme participation. Potential for common solutions to deliver improved management of risk and continued shared practice. Improved relations at borough level with other stakeholders, such as finance and property and estate management due to independent analysis and review of strategy and operations 
A clear overview of the energy performance of London's asset and a platform of energy efficiency 
measures that can be implemented Pan-London on an on-going and sustainable basis Improved integration of energy measures in property and asset management 
 
Please explain how the work undertaken during the running of this project will continue to deliver benefits after project closure.  How will the 
outputs be owned, maintained or updated? 
 
2.14 
How will lessons learnt be captured and 
The report into Pan-London energy efficiency measures will be disseminated to Capital Ambition 
Efficiency Board and all boroughs along with its recommendations. In addition, information and best practice determined during the completion of this project will be set 
out and explained during the launch event for the next phase of the CRC Toolkit. Any issues, barriers, successes will be communicated as appropriate Any common themes identified as part of the independent review of individual boroughs will be flagged as potential areas of support to the Efficiency Board to enable effective management of Pan-London risks and costs 
 
disseminated? 
Capital Ambition requires that you keep a lessons learned log to be shared with others who may run similar projects in the future. 
 
 
Section 3. Key Milestones Please list the key activities, scheduled start and finish date and who has been assigned responsibility 
No. Description 
Responsible Officer (if known) 

                                                 Template version 4.0 
Scheduled Start 
Scheduled Finish 

## Section 3. Key Milestones

Please list the key activities, scheduled start and finish date and who has been assigned responsibility 
No. Description 
Responsible 
Scheduled Start 
Scheduled Finish 
Officer (if known) 
 
Achieve funding for project, locally or nationally 
 
July 2010 
 
 
Agreement of scope / outline narratives / deliverables 
 
July 2010 
 
 
Contract Document signoff 
 
<tbc> 
<tbc> 
 
Desk top research; questionnaire development, interview design, auditor briefing and drafting of bilateral agreement 
 
June 2010 
15 July 2010 
 
Marketing of service availability 
 
June 2010 
22 June 2010 
 
Issue questionnaires and carry out telephone interviews  
 
12 July 2010 
13 August 2010 
 
Desktop review, report preparation and client presentations 
 
12 July 2010 
31 August 2010 
 
Health Check service completion  
 
 
31 August 2010 
 
Assessment of energy efficiency measures data  
 
12 July 2010 
31 August 2010 
 
Report and recommendations about energy efficiency measures 
 
 
September 2010 

 
Thank you for completing this proposal.  We are happy to receive a copy by email to CA-PMO@londoncouncils.gov.uk. Please sign and send hard copy to: Capital Ambition Programme Office Capital Ambition London Councils 59½ Southwark Street London SE1 0AL 
 
                                                  Template version 4.0 
 
Signed……………………………………………………………………Date…………………………………………………………………………………… Print Name ………………………………………………………………Position……………………………………………………………………………….. Before submission please ensure this proposal has the support of your Chief Executive, and where appropriate Elected Members. 

## Subject: Supplier Relationship Development - Benefits Realisation Christine Morton, Procurement Project Manager Report By:

 
Email: christine@mortonatlantic.com  
 

## Strategic Theme: Delivering Together

 
Purpose:  To consider the attached progress report on benefits realisation for the Supplier Relationship Development (SRD) project as requested at the Efficiency Board meeting on 
20 April 2010. 

Executive summary:  
At its meeting on 20 April 2010, the Efficiency Board considered and approved a request for funding for the expansion of the SRD project and asked for an update report on benefits realisation for the work to date. A report from the SRD Procurement Project manager is appended for consideration. 

 
 
Recommendation: 
That the Board notes and comments on the attached progress report on benefits realisation 
for the SRD project. 

## Appendices: Appendix A:  Supplier Relationship Development Project - Benefits Realisation Report Background Papers: None

 

# Capital Ambition Supplier Relationship Development Project

                                  
        BENEFITS REALISATION REPORT 
 
                                          Project Host: Mark Atkinson 
                                   Deputy Head of Procurement and  
                             Head of Contracts Management Group 
                                                London Fire Brigade 
                    
                                       Prepared by: Christine Morton 
                                                   Project Manager 
                                                                    
                                                  Date: July 5th 2010 
                                  

## Supplier Relationship Development Project Purpose

This document reports on  
ƒ 
the progress to date of the London Fire Brigade (LFB) Supplier Relationship 
Development1 Project (SRD) (also formerly known as the Strategic Supplier 
Intelligence and Contract Relationship Management projects), 
ƒ 
the identified benefits  
ƒ 
the level of committed funds. This project gives opportunities to London local authorities to achieve efficiencies and 
performance improvements from strategically critical contracts, as well as improving 
contract management and supplier relationship practices. 

## Executive Summary

 
London local authorities spend over £9 billion annually on goods and services.2  The 
top 100 suppliers in London account for approximately 25% of this total and the top 
1,000 suppliers for nearly 60%.  Collectively, London authorities can account for over 
70% of the turnover for some of these suppliers and are therefore in a very strong 
position to ensure the best possible outcomes in terms of efficiency savings, quality, 
value for money, and innovation. 
 
The Supplier Relationship Development Project has identified outputs that can support 
London local authorities in achieving these efficiency and best value outcomes by 
improving the way contractual relationships are managed. In particular, this involves 
collaborative working to achieve improvements in performance and deliver 
cashable savings and efficiencies.  To date, this includes identification of 
opportunities such as replacement of Paladin bins, which is expected to deliver £3m 
per annum savings; common specifications, which is expected to deliver £600K per 
annum, and use of SRD tools and techniques, which has already delivered £52K in 
efficiency savings for London Fire Brigade. It forms a strategic part of the restated 
goals of Capital Ambition under the Future Shape report3; namely, it provides support 
for service delivery improvement, and wider sharing of efficiencies such as common 
specifications. 
 

## Background

 The Supplier Relationship Development Project is currently in its fourth phase.  The prior three phases included completion of the Status Review of Contract and Relationship Management in London, and the Strategic Supplier Intelligence Project, which discovered that of the £9.3 billion spent annually by London local authorities, the top 100 suppliers accounted for 25% of the spend. 

 
1 Supplier Relationship Development is the process of working with an organisation's suppliers to achieve cost savings and efficiencies on existing contracts for the mutual benefit of the organisation and its suppliers.   
2 www.contractsregister.com 3 The Future Shape Report was presented to the new Capital Ambition Board on 15th June 2010, and reviewed the direction of Capital Ambition programmes and work given the current economic and political climate.   

A decision was taken as a result by the previous London Centre of Excellence Board 
to pursue Supplier Relationship Development after the writing and publishing of "You 
and Your Contractor: A Manual of Best Practice for Contract and Relationship 
Management Practitioners" and the research into the supplier landscape for London 
using the Contracts Register Service, the Spend Analysis, and Information Arbitrage 
(which is specialist analyst information detailing the financial and corporate health, 
strategic direction and market positioning of selected suppliers).  The two projects 
were then combined to capitalise upon the collaborative power of London local 
authorities with their existing suppliers so that savings and efficiencies can be made 
for both local authorities and their suppliers.   
 
In Phase 3, two suppliers of the top 100 suppliers in London were chosen to work 
together with London local authorities to improve existing contracts for mutual 
benefit.  The suppliers chosen were Veolia, in the waste sector, with an annual spend 
across London boroughs of £171m; and Care UK, in the social care sector, with an 
annual spend of £36m.  Local authorities currently have contracts with Veolia for 
waste collection, waste disposal, grounds maintenance, winter maintenance, 
recycling, and street cleansing.  Care UK contracts cover home care, residential and 
nursing care homes (including PFIs), and foster care.   
 
In April 2010, a bid to extend the scope of the original project was agreed by the 
Capital Ambition Efficiency Board.  The work that is covered under Phase 4 is as 
follows:  
 
1. Continued Support for the Veolia and Care UK workstreams 
    
   The Veolia and Care UK workstreams have been identified and are in the process 
   of being implemented. Assistance is being given to the Collaboration Teams to 
   facilitate implementation and deliver savings and efficiencies. 
    
2. Consultancy Support to maximise the rollout of the Supplier Relationship 
   Development approach in London to other programmes in the Highways, ICT and 
   Construction sector programmes 
 
   The Supplier Relationship Development work with Veolia and Care UK has enjoyed 
   a high profile amongst London local authorities.  Existing category groupings 
   without an SRD approach have been eager to add SRD to their work, and follow 
   the same processes used in Phase 3.  As they have existing stakeholder groups, 
   the existing momentum for seeking savings and efficiencies can be capitalised 
   upon by working with their existing suppliers. Consultancy type support is being 
   given to each programme. This provides a flatter and more effective structure to 
   roll out the benefits of the SRD approach across a wider area in a much shorter 
   amount of time. Ownership of the deliverables and the work rests with each 
   individual category grouping,. 
    
   The categories are: 
    
       Highways  
              Selected Suppliers -  Volker and Conway 
              Project Manager -  
                                   Dana Skelley, Transport for London 
                                   Gordon 
                                              Prangnell, 
                                                          London 
                                                                     Borough 
                                                                                of 
                                   Hammersmith and Fulham 
                                   Chris Tunstall, Transport for London 
               

 
ICT (London Contracts Board) 
 
 
Selected Supplier - 
Northgate 
 
 
Project Managers -  
Steven Blantz, London Borough of Camden 


Tim Kidd, London Borough of Enfield 
Construction 
 
 
Selected Suppliers -  
Kier, Willmott Dixon and Apollo Property Services 
 
 
Project Manager - 
Julia Vernalls, Capital Ambition 


It is worth noting that an early appraisal of contractor rates for Highways spend in London has highlighted a £34million gap between the highest and lowest rates. 
There are many reasons for this gap. However, whilst the entire £34million cannot 
be simply converted to cashable savings, it is anticipated that significant amount of cashable savings will be achieved via the efficiency workstreams already 
being offered by the SRD Consultancy Support. These include standardised specifications and performance systems, supplier inputs into leaning cost model 
options, affordability testing and reviews, etc. The SRD project provides consultancy support for the three groups to pursue the programme of work below, for all selected suppliers: 
 
ƒ 
continue collaborative working with London local authorities to finalise SRD strategies for the selected contractors;  
ƒ 
facilitate and support the delivery of a jointly agreed plan of work between 
local authorities and the suppliers. The objectives of the work plans are focused on quality and service improvements, delivering efficiencies and improving risk management; 
ƒ 
develop the process of supplier intelligence by determining risks for London 
local authorities in key supply markets such as relative strengths or vulnerabilities, 
market 
conditions, 
financial 
failure, 
political, 
logistical, 
contingency planning, etc; 
ƒ 
integrating this work with other CA/RIEP projects and the work of the OGC to attain the best results; and 

   ƒ 
       demonstrate the opportunities for significant improvements in quality and 
       value that can be gained if authorities work collaboratively within the field of 
       supplier relationship development. 
 
   The Highways, ICT and Construction groups listed above will be submitting 
   applications to Capital Ambition for project management assistance as and 
   when they are ready (expected July 2010). 
    
   There are also other emerging categories that look to be strong candidates to 
   benefit from this approach. 
 
3. Create a Supplier Relationship Development Toolkit for wider use within local and 
   central government 
    
   As a result of the progress made with Veolia and Care UK, other local authorities 
   and groups in London and beyond (e.g. Department for Work and Pensions) have 
   approached the SRD Project Team with requests to utilise the same processes for 
   SRD with other suppliers, on a regional and/or sub-regional basis, particularly 
   where there are vast numbers of common suppliers and category management is 
   indicated.  It is clear that it is important to develop a SRD Toolkit which will allow 
   other local authorities to run their own Supplier Relationship Development projects 
   using the same tools and techniques developed within Phases 2 and 3.   
    

       
4. Pilot Supplier Relationship Development in a Localised Setting 
       
      The Phase 3 work has developed a suite of products (e.g. Efficiency Work Stream 
      identification, mapping and processing, Common Assessment Framework, etc.) 
      that can be used within a more localised context, such as a single client - 
      contractor relationship, in a major contract. The SRD concept is being rolled out 
      within London Fire Brigade (LFB) to identify efficiency and improvement 
      opportunities, and further develop SRD and its potential uses in localised settings 
      rather than a pan London borough environment.  LFB have already started using 
      some of the SRD products, and have identified a number of efficiency 
      workstreams. The first workstream is currently being implemented and is providing 
      an efficiency saving of £52k per year. Early indications are positive that SRD 
      products and approaches can be easily adapted to suit single major contractual 
      relationships. This "localised" potential further reinforces the efficiency savings 
      potential of SRD in both local and central government. 
 

## Progress To Date

 The original Supplier Relationship Development project objectives were to: 
- 
support the achievement of cashable and non cashable savings 
- 
deliver improvements in performance and greater efficiencies beyond tactical commodity and services; 
- 
focus resources on areas of greatest longer term potential; 
- 
consolidate and improve on standards of contract management and effective 
supplier relationships; 
- 
develop the management of supplier relationships at the appropriate level (Borough, regionally or sub-regionally); 
- 
understand optimum trading mechanisms and collaboration formats; and 
- 
embed a more commercial approach to supplier intelligence gathering, its effective use and relationship management. The goal was to engage suppliers and coordinate engagement across their London local authority customers.  The project team's delivered milestones include: 
Veolia 
 
- 
To secure stakeholder engagement, met with all 15 local authorities that use Veolia. 
- 
Developed a Common Assessment Framework (CAF)4 to gauge the issues 
common to all of Veolia's London local authority customers. An evaluation matrix and accompanying report have also been finalised with the results published to local authorities.   
                                                     
- 
Received a "reverse" Common Assessment Framework to understand the issues that Veolia encounters as a supplier to London local authorities and identify areas for improvement. 
- 
Obtained specialist analyst information on Veolia as a publicly traded 
company, to assess the impact of the recession and to understand the key financial issues facing Veolia.   
- 
Held a workshop for London local authorities to discuss the CAF results, agreed an initial list of areas for collaboration and appointed the collaboration team. 
- 
Held collaboration team meetings, where roles have been agreed and an 
initial list of topics defined. 
- 
Held joint collaboration team meetings with Veolia, and prioritised two workstreams for initial focus: 
- 
overheads 
- 
bulk bins (replacement of Paladin-style bins) 
- 
Added detail on the workstreams.  A workbook template has been developed to manage each workstream and capture initial savings figures (in excess of £3m - see table of expected benefits).  
- 
Agreed a Terms of Reference document.  
- 
Agreed a Press and PR Protocol. 
- 
Drafted a joint newsletter to be issued to all London local authority customers of Veolia.   
- 
Commissioned legal advice. 
 
Care UK 
 
- 
Met with almost all of the 28 local authorities that use Care UK to secure buyin. 
- 
Developed a Common Assessment Framework to gauge the issues common to all of Care UK's London LA customers.  An evaluation matrix and 
accompanying report have been written and distributed, showing good 
potential for improvement.   
- 
Obtained specialist analyst information on Care UK as a publicly traded company, to assess the impact of the credit crunch and to understand the messages they are sending to their investment community.   
- 
Held a workshop for London local authorities to discuss the CAF results, agreed an initial list of areas for negotiation and appointed a negotiating team. 
- 
Held negotiation team meetings and expanded on the list of areas for negotiation. 
- 
Held a workshop for Care UK internal stakeholders to understand the SRD project, encourage them to run a CAF process on local authority behaviour as customers, and appoint a negotiation team. 
- 
Agreed Terms of Reference  
- 
Agreed Press and PR Protocol to Care UK.   
- 
Held joint negotiation team meetings where workstreams on both sides were brought to the table and agreed.  The workstreams prioritised are: 
- 
Determining an agreed quality consensus 
- 
Finding a pan-London approach to staff retention and development 
- 
Business Continuity Planning 
- 
Data Capture, Performance Reporting and KPI standardisation 
- 
Client Contract Assistance 
- 
Document Standardisation 
- 
Re-evaluated negotiation team membership due to tender processes beginning.  Some members have had to step back from negotiations to avoid 
any potential conflicts of interest. 
- 
Received a "reverse" Common Assessment Framework to understand the 
issues that Care UK encounters as a supplier to London local authorities and identify areas for improvement. 
- 
Commissioned legal advice. 
 
Highways: Volker and Conway 
 
- 
Held an SRD workshop for London local authorities to start the SRD Highways project, communicate the project plan, and begin work on identifying opportunities. 
- 
To secure stakeholder engagement, met with 4 local authorities that use Volker and/or Conway; as of this writing, more meetings are planned. 
- 
Obtained specialist analyst information on both Volker and Conway as 
companies, to assess the impact of the recession and to understand the key financial issues facing both.   
- 
Met with Volker to obtain approval to proceed with SRD; the respective 
Conway meeting was held 2nd July.  It is worth noting that should either 
contractor chosen decline participation in the SRD project, three alternates 
have been selected to pursue further. 
ICT: Northgate 
 
- 
Obtained specialist analyst information on Northgate as a company, to assess 
the impact of the recession and to understand the key financial issues facing both.   
- 
Contacted the OGC to tap into their national SRD programme with Northgate, to ensure there is no duplication of work.   

## Construction: Kier, Willmott Dixon And Apollo Property Services There Has Been No Progress On Construction As The Project Is Awaiting Benefits Realisation Figures Before Proceeding. Creation Of A Supplier Relationship Development Toolkit Not Yet Started. Supplier Relationship Development In A Localised Setting The Project Team Has Presented To The Gla Group In An Effort To Showcase The Work Done To Date And Consider Strategies For The Way Forward.  A Plan Is Being Produced To Run A "Reverse" Common Assessment Framework With Assetco. On How They Perceive London Fire Brigade'S Customer Behaviour. Expected Benefits

 While it is difficult to calculate in financial terms the expected benefit of some of the workstreams, others are being progressed.  As of this writing, the expected benefits of 
the bulk bin workstream with Veolia are in excess of £3m if applied across all of London's waste collection contracts, not just the ones held with Veolia.  All figures are 
best estimates and are subject to take-up. 
Supplier 
Workstream 
Description 
Expected Benefit (if all London takeup) 
Veolia 
£3,051,775  
(cashable and noncashable) 
and 527,880 kg 
CO2 reduction in 
emissions 
Per Annum 
 
(Please note to 
implement this 
workstream there is 
a capital cost for 
the new bins, and 
funding sources, 
such as grants or 
invest-to-save, are 
being investigated).  
Bulk Bins 
Replacing bulk bins for multiresidence properties would result in 
cost 
savings 
in 
vehicle 
standardisation 
as 
well 
as 
reducing health and safety risks for old-style bins.  The older, less efficient style is a paladin bin. These are the old, cylindrical metal bins. They need a specific lift on the back of the collection vehicle, are difficult to move, and 
ugly. 
The 
modern 
replacement is either a 940 litre or 1100 litre wheeled bin. These have affixed lids, are easier to move, and fit standard bin lifts. 
Financial benefits to be calculated. 
Super 
Depots 
and 
Joint 
Working 
It must be accepted that each LA Contract has its individual constraints; 
pricing 
units, 
reporting 
systems, 
defaults, 
targets, 
staffing 
levels, 
inflationary 
increases, 
emergency works, disposal costs and the like, vary dramatically.  
However, within this complex framework, efficiencies are still available. 
At 
present, 
Veolia 
operate one depot for each Contract; many administrative functions 
are 
duplicated. 
Supervision, 
accounts, 
management information could be rationalised. 
Shared Management Information 
Improved availability 
of 
benchmarking information. 
The 
information 
required 
by 
councils is relatively constrained by BVPIs, WasteDataFlow and LATS. 
Sharing 
and 
crossreferencing the reporting and invoicing 
requirements 
across 
differing Contracts may identify efficiencies. 
Shared Management 
Veolia are well placed to explore the variances among contracts, 
Improved sharing of best practice. 
| Supplier                              | Workstream                       | Description    | Expected Benefit     |
|---------------------------------------|----------------------------------|----------------|----------------------|
| (if all London take-                  |                                  |                |                      |
| up)                                   |                                  |                |                      |
| Expertise                             | and                              | to             | demonstrate          |
| potential for savings. If systems,    |                                  |                |                      |
| information provision and the         |                                  |                |                      |
| backing evidence for invoicing        |                                  |                |                      |
| can be homogenised, savings           |                                  |                |                      |
| would                                 | be                               | generated.     | More                 |
| efficient payment systems mean        |                                  |                |                      |
| better                                | cash-flow,                       | and            | also                 |
| provide the information to react      |                                  |                |                      |
| more quickly and coherently to        |                                  |                |                      |
| common                                | problems                         | (snow,         |                      |
| industrial action, depot fires, etc). |                                  |                |                      |
|                                       |                                  |                |                      |
|                                       |                                  |                |                      |
| Specification                         |                                  |                |                      |
| Changes                               |                                  |                |                      |
| Councils need to take on board        |                                  |                |                      |
| the option that shared depots,        |                                  |                |                      |
| adjusting specifications, revising    |                                  |                |                      |
| invoicing methods and sharing         |                                  |                |                      |
| resources                             | may                              | generate       |                      |
| efficiencies. This would require an   |                                  |                |                      |
| open-minded approach to joint         |                                  |                |                      |
| working.                              |                                  |                |                      |
|                                       |                                  |                |                      |
| £200K per                             |                                  |                |                      |
| specification per                     |                                  |                |                      |
| authority; reduced                    |                                  |                |                      |
| legal costs.  If three                |                                  |                |                      |
| local authority                       |                                  |                |                      |
| tender processes                      |                                  |                |                      |
| are run per annum,                    |                                  |                |                      |
| there is a savings of                 |                                  |                |                      |
| £600K p.a.                            |                                  |                |                      |
| Cash Flow                             | Councils have the opportunity to |                |                      |
| pay bills faster which may help       |                                  |                |                      |
| Veolia                                | from                             | a              | cash                 |
| perspective.  eBilling may also be    |                                  |                |                      |
| an option.                            |                                  |                |                      |
|                                       |                                  |                |                      |
| Reduced                               | billing                          |                |                      |
| errors, and reduced                   |                                  |                |                      |
| invoice                               | processing                       |                |                      |
| costs.                                | At                               | a              |                      |
| minimum, one third                    |                                  |                |                      |
| of a post saving for                  |                                  |                |                      |
| each                                  | contract                         |                |                      |
| equates to £12k per                   |                                  |                |                      |
| contract                              | per                              |                |                      |
| borough.                              |                                  |                |                      |
| Central                               |                                  |                |                      |
| Government                            |                                  |                |                      |
| Guidance                              |                                  |                |                      |
| Improved guidance                     |                                  |                |                      |
| issued from central                   |                                  |                |                      |
| government                            | to                               |                |                      |
| spread                                | best                             |                |                      |
| practice.                             |                                  |                |                      |
| Guidance issued from central          |                                  |                |                      |
| government does not always            |                                  |                |                      |
| take into account operational         |                                  |                |                      |
| experiences.                          |                                  | For            | example,             |
| recent recommendations in the         |                                  |                |                      |
| new WRAP guidance promote             |                                  |                |                      |
| kerbside sorting when in reality it   |                                  |                |                      |
| is not operationally sound.  There    |                                  |                |                      |
| is a role for local authorities to    |                                  |                |                      |
| play                                  | to                               | communicate    | such                 |
| experiences                           | to                               | central        |                      |
| government                            | and                              | thus           | assist               |
| themselves                            | and                              | suppliers      | in                   |
| delivering services.                  |                                  |                |                      |
|                                       |                                  |                |                      |
| Performance                           |                                  |                |                      |
| Monitoring                            |                                  |                |                      |
| Both Veolia and local authorities     |                                  |                |                      |
| are doing the same job of             |                                  |                |                      |
| monitoring performance.  There        |                                  |                |                      |
| could be a better way to use          |                                  |                |                      |
| technology in this area.  Veolia's    |                                  |                |                      |
| biggest expenditure in that area      |                                  |                |                      |
| is interfacing, as the typical        |                                  |                |                      |
| Improved                              |                                  |                |                      |
| benchmarking and                      |                                  |                |                      |
| performance                           |                                  |                |                      |
| monitoring;                           |                                  |                |                      |
| reduced monitoring                    |                                  |                |                      |
| costs                                 | (financial                       |                |                      |
| benefits yet to be                    |                                  |                |                      |
| Supplier                             | Workstream    | Description    | Expected Benefit     |
|--------------------------------------|---------------|----------------|----------------------|
| (if all London take-                 |               |                |                      |
| up)                                  |               |                |                      |
| calculated).                         |               |                |                      |
| interface costs between £50-         |               |                |                      |
| £100K to develop, and affects        |               |                |                      |
| overheads.  There could be a         |               |                |                      |
| hosted site option to address this.  |               |                |                      |
|                                      |               |                |                      |
| Shared                               | best          |                |                      |
| practice.                            |               |                |                      |
| Cost                                 |               |                |                      |
| Avoidance                            |               |                |                      |
| One efficiency would be cost         |               |                |                      |
| avoidance                            | by            | sharing        |                      |
| experiences.  Veolia and local       |               |                |                      |
| authorities incur large costs when   |               |                |                      |
| repeating mistakes, and there is     |               |                |                      |
| a need for wider sharing of          |               |                |                      |
| methodology.                         |               |                |                      |
|                                      |               |                |                      |
| Care UK                              |               |                |                      |
| Agreed                               | quality       |                |                      |
| measurements                         | to            |                |                      |
| enable                               | improved      |                |                      |
| benchmarking and                     |               |                |                      |
| provide                              | clarity       | to             |                      |
| stakeholders.                        |               |                |                      |
| Quality                              |               |                |                      |
| Consensus                            |               |                |                      |
| Generically speaking, there is no    |               |                |                      |
| agreed consensus as to the           |               |                |                      |
| quality of services provided by      |               |                |                      |
| Care UK to their clients (other      |               |                |                      |
| than CSCI ratings).  It would be     |               |                |                      |
| helpful if both parties agreed to    |               |                |                      |
| use,                                 | for           | example,       | a                    |
| advocate group, to agree the         |               |                |                      |
| benchmark for quality and work       |               |                |                      |
| towards improvements based on        |               |                |                      |
| that baseline.                       |               |                |                      |
|                                      |               |                |                      |
| Business                             |               |                |                      |
| Continuity                           |               |                |                      |
| Planning                             |               |                |                      |
| Improved ability to                  |               |                |                      |
| respond                              | to            |                |                      |
| potential disruptions                |               |                |                      |
| in service provision.                |               |                |                      |
| There is no business continuity      |               |                |                      |
| plan that covers all of London;      |               |                |                      |
| plans may exist to cover a           |               |                |                      |
| particular                           | borough,      | but            | not                  |
| across the boundaries.               |               |                |                      |
|                                      |               |                |                      |
| Consistency                          | in            |                |                      |
| provision to clients,                |               |                |                      |
| clarity to providers,                |               |                |                      |
| and reduced legal                    |               |                |                      |
| costs                                | from          | a              |                      |
| consistent                           |               |                |                      |
| approach.                            |               |                |                      |
| Client Contract                      |               |                |                      |
| Assistance                           |               |                |                      |
| Under                                | the           | scope          | of                   |
| Personalisation                      | Agenda,       | the            |                      |
| ultimate customer of suppliers will  |               |                |                      |
| be the client and their families.    |               |                |                      |
| Clients and their families may not   |               |                |                      |
| be                                   | in            | a              | position to          |
| contracts that will serve their best |               |                |                      |
| interests                            | with          | suppliers.     |                      |
| standardised template that can       |               |                |                      |
| be flexible to adapt to individual   |               |                |                      |
| clients' needs would assist.         |               |                |                      |
| Reduced                              |               |                |                      |
| monitoring                           | costs         |                |                      |
| (financial benefit to                |               |                |                      |
| be calculated).                      |               |                |                      |
| Joint Monitoring                     | Local         | authorities    | currently            |
| monitor the same home multiple       |               |                |                      |
| times                                | over          | if             | they                 |
| placements there, causing home       |               |                |                      |
| management to be inspected           |               |                |                      |
| multiple times.                      |               |                |                      |
|                                      |               |                |                      |
| A pan-London approach to staff       |               |                |                      |
| development and staff retention      |               |                |                      |
| is needed.                           |               |                |                      |
|                                      |               |                |                      |
| Consistent                           | training      |                |                      |
| methods related to                   |               |                |                      |
| KPIs                                 | and           | agreed         |                      |
| quality standards.                   |               |                |                      |
| Pan                                  | London        |                |                      |
| Approach                             | to            |                |                      |
| Staff                                |               |                |                      |
| Development                          |               |                |                      |
| and Retention                        |               |                |                      |

 
Further detail on the benefits methodology used is available for inspection, and some 
capital outlays will be involved; however, there are options for grant funding and/or 
increased fees.  All calculations are approximate.  Other workstreams have been 
identified for a second tranche of delivery. 
 
For the suppliers that have recently joined the programme in Highways, ICT and 
Construction, workstreams have not yet been agreed as negotiation teams have not 
yet been named.  However, from the initial meetings it is clear that there are 
efficiencies to be gained in areas including common specifications, monitoring and 
others. 
 
The value of the toolkit, once delivered, is expected to be at £25K per borough.  This is 
the expected cost of educating that borough and developing tools and techniques 
for the SRD process via consultancy.  Without a base knowledge of the mechanics of 
Supplier Relationship Development, further projects would be limited in their chances 
of success.  
 

## Level Of Committed Funds

 
The bid in April 2010 agreed funding of £215,000 for the project extension through 
May 2011.  £115,856 was unspent for the period to 31st March 2010, and was agreed 
to be carried over to the 2010/11 fiscal year.   

## Capital Ambition Shared Services And Joint Procurement Board 2010/11 Forward Plan Standing Items: Apologies; Minutes; Progress And Budget Update For Efficiency Related Projects; Current Issues And Aob

| Item                       | Purpose of Item           | Funding             | Savings                 |
|----------------------------|---------------------------|---------------------|-------------------------|
| Request                    | Forecast                  |                     |                         |
| £                          |                           |                     |                         |
|                            |                           |                     |                         |
|                            |                           |                     |                         |
| 7 September 2010           |                           |                     |                         |
| JIP: Complex Aids to       |                           |                     |                         |
| Daily Living               |                           |                     |                         |
| Potential request for      |                           |                     |                         |
| funding to implement       |                           |                     |                         |
| service change across      |                           |                     |                         |
| London                     |                           |                     |                         |
| 250,000                    | 10,000,000 Julia Vernalls | Pending development |                         |
| of options appraisal       |                           |                     |                         |
| funded by JIP/DoH          |                           |                     |                         |
| Property & Asset           |                           |                     |                         |
| Management                 |                           |                     |                         |
| Tentative-To take forward  |                           |                     |                         |
| the recommendations from   |                           |                     |                         |
| the EC Harris report on    |                           |                     |                         |
| Property and Asset         |                           |                     |                         |
| Management                 |                           |                     |                         |
| TBC                        | 0                         | Julia Vernalls      | Meeting with ECH 13     |
| July 2010                  |                           |                     |                         |
|                            |                           |                     |                         |
| Pan London Libraries       |                           |                     |                         |
| Programme                  |                           |                     |                         |
| Request for funding        | TBC                       | Caroline Stanger    |                         |
| Debt recovery hub and      |                           |                     |                         |
| one stop income and        |                           |                     |                         |
| assessment service         |                           |                     |                         |
| (Croydon)                  |                           |                     |                         |
| PID                        | 74,000                    | 0                   | Caroline Stanger        |
| respond to CS              |                           |                     |                         |
| comments of                |                           |                     |                         |
| 23 June 2010               |                           |                     |                         |
| One Stop Income &          |                           |                     |                         |
| Service Assessment Tool    |                           |                     |                         |
| (Croydon)                  |                           |                     |                         |
|                            |                           |                     |                         |
| PID                        | 95,000                    | 0                   | Caroline Stanger        |
| respond to CS              |                           |                     |                         |
| comments of                |                           |                     |                         |
| 23 June 2010               |                           |                     |                         |
| Promoting Independence     |                           |                     |                         |
| and Social Inclusion for   |                           |                     |                         |
| Adults with Mental Health  |                           |                     |                         |
| Problems (Croydon)         |                           |                     |                         |
| EOI                        | 407,000                   | 5,000,000 (by       |                         |
| year 5)                    |                           |                     |                         |
| Julia Vernalls             | With JIP for comment      |                     |                         |
| 5 July 2010                |                           |                     |                         |
|                            |                           |                     |                         |
| SRD: ICT - Northgate       | Funding for Project       |                     |                         |
| Manager                    |                           |                     |                         |
| 40,000                     | 0                         | Ken Cole            | Ken Cole/slipped        |
| from 12 July meeting       |                           |                     |                         |
|                            |                           |                     |                         |
| SRD: Construction          | Funding for Project       |                     |                         |
| Manager                    |                           |                     |                         |
| 40,000                     | 0                         | Julia Vernalls      | Julia Vernalls/ slipped |
| from 12 July meeting       |                           |                     |                         |
|                            |                           |                     |                         |
| Agency Staff and           |                           |                     |                         |
| Consultancy Spend          |                           |                     |                         |
| Possible proposal for      |                           |                     |                         |
| actions to address current |                           |                     |                         |
| spend.                     |                           |                     |                         |
| TBC                        | TBC                       | Sally Reynolds      | Paper being             |
| developed for Dir of       |                           |                     |                         |
| CA                         |                           |                     |                         |
|                            |                           |                     |                         |
|                            |                           |                     |                         |
| PM or Item Contact    | Comments/ PMO    |
|-----------------------|------------------|
| Next Steps            | Date             |
| £                     |                  |
|                       |                  |
|                       |                  |
|                       |                  |
|                       |                  |