Select Committee on Public Administration Appendices to the Minutes of Evidence

Memorandum by Blackburn with Darwen Borough Council (PSR 14)


  Blackburn with Darwen Borough Council became a unitary Council in April 1998. In the run up to becoming a unitary Council the former district Council was determined to understand as much as possible about the services it was to inherit, and not merely to "bolt on" to an existing management structure, but to but to look across the range of Council services, to see how they could be better co-ordinated and to examine the relationship of inter-agency and partnership working. There was also a wish to build on the strong partnership and regeneration activity, which had been a feature of the Borough in the preceding decade.

  The management structure that emerged had a strong central strategic focus with a Chief Executive and three Executive Directors all of whom have no departmental responsibility.

  This strong senior strategic and co-ordinational centre together with clear strong political leadership came into its own when the then new elected government launched a raft of initiatives which were "cross-cutting", not only across the Council but beyond into other agencies or partnerships. This has been further strengthened more recently with the Council's streamlined political decision-making processes with a Leader, largely without portfolio, and seven other Executive members with portfolio responsibilities. These arrangements, together with robust scrutiny arrangements have been operating in pilot form for eighteen months. They will be fully operational under a new Constitution from January 2002, when the two Opposition party Leaders will join the Board without portfolio.

  The first imperative of a move to unitary status was a smooth change-over, but once achieved it was important to make a difference, otherwise what was the point of the change?

  Whilst structural change is not necessarily a good thing in its own right, it does bring a momentum and energy to the organisation which has been sustained, and the earlier examination and consultation on the new services to be provided, created an atmosphere where change was not resisted, and was not feared, but seen more easily, than in organisations not used to change, as an opportunity to do things better and "think outside the box". (As an aside it is interesting to see how a number of County Councils are now injecting this approach through "Directors of Change.")

  Since unitary status the Council has made significant improvements, being a beacon Council for Education after less than two years as a Local Education Authority (LEA), and having an excellent Ofsted and good Social Services Inspection(SSI) report. The Council was the first Improvement and Development Agency (IDeA) pilot peer group review, as well as one of the first six Public Service Agreement (PSA) pilots. We have had two and three star (three star being the highest rating) Best Value inspections. A bottom up Community Plan was agreed with our partners over a year ago and this forms the bedrock of our strategic planning. We have also embarked on an ambitious town centre regeneration scheme and developed industrial parks along the M65 motorway.

  We are prepared to be pragmatic—we transferred our housing stock of about 8000 houses to a social landlord, and we entered a ground-breaking partnership with CAPITA to provide some of our support services, and to create a north-west business centre and 500 additional white collar jobs.

  I will return to this in a little more detail later, as an example of partnership working with the private sector, with the support of staff and unions, to provide more efficient service delivery and a major regeneration initiative.

  I don't think that such a wide-ranging and imaginative partnership could have been established if the Council was less well focussed, pragmatic and forward-thinking.

What are the impediments to better service delivery?

  So we have done well, but we can also improve in some areas.

  Some things we can do ourselves; in other cases there are in our view unnecessary impediments hindering our progress.

  In some cases there will be no alternative to significant injections of resources, such as low value unfit and sometimes derelict private sector housing in our area.

  But there are others, which are issues of organisation and co-ordination at central government level rather than resource issues, such as:

    —  The number of Inspection regimes.

    —  The number of plans required by Government.

    —  The bureaucracy of Best Value, which has damaged a basically good concept.

    —  Competition between Inspection regimes/civil service departments, etc.

    —  The same levels of inspection irrespective of the overall corporate health of the organisation.

    —  The delivery of Government funds through individual departmental or area based initiatives.

  It is known that the Government is looking at some, if not all, of these issues in relation to the forthcoming White Paper. Indeed we have been involved in various Cabinet Office/DLTR/LGA sessions to advise on improvements. It is important though to remember also that these issues cannot be resolved individually as they inter-relate and impact on one another. Indeed one of the major problems for local authorities in recent years has been the combined effect on the overall resources of a local authority of plans, inspections, and individual initiatives.

Public/Private Partnerships

  I will now return to Public Sector ethos and the role of the private sector and in particular the Councils partnership with CAPITA. I am aware that the Committee has received both verbal and written evidence from CAPITA and that the Blackburn with Darwen Partnership has both been referred to generally, and demonstrated as a case study in the written evidence.

  It may be helpful to the Committee to understand the "drivers" from a local authority perspective for such a partnership.

  As mentioned in the earlier background, Blackburn with Darwen Council has been through considerable change, has strong political and officer leadership, and has a clear objectives shared with its partners.

  Whilst the wide-ranging partnership entered into embodies all the principles of Best Value, it was not delivered through the Best Value template.

  The initial basic proposition was to provide support services to the Council more efficiently by transferring a minimum of 150 staff into a business centre and use these staff as a base for a north west office to provide similar services to the public and private sectors in the region, and in some cases nationally.

  Transferring significant numbers of staff into the private sector is not the most immediately attractive proposition to most local authorities. But there was more on offer in the overall package most particularly the creation of good quality white-collar jobs in a predominately manufacturing area.

  It is important to stress that this is not a straight out-sourcing, but a strategic partnership governed by a partnership board with 50/50 membership Council/CAPITA with the Council Leader in the chair. The partnership is nevertheless under-scored by a fifteen year contractual agreement which provides for improved outputs beyond the Council's Best Value targets, targets for use of local labour and suppliers, and diversity. The Council therefore sets the standards and ethos for the services provided and remains very much "in charge". The Strategic Board reports to the Council's Executive Board and is subject to the Council's normal scrutiny arrangements. Council officers and CAPITA managers form a lower level Operational Board through which the Council monitors the detailed performance targets within the contract.

  The services covered include personnel, revenues and payroll, housing benefits, civil engineering, architecture and property management. The contract started in June 2001. Just short of 500 staff have been transferred under TUPE, without a single appeal.

  Gaining the confidence of the staff and unions was a vital element in the process of securing the partnership. Staff and union representatives were taken to visit other CAPITA sites throughout the country to speak directly to staff who had previously been transferred. After understandable initial uncertainty the staff and unions have been very supportive, and it was somewhat ironic that this transfer took place in the summer against a background of national debate with staff and unions exercised about the involvement of the private sector in the provision of public services.

  The partnership contract allows the Council to claw back any excess profits made from the business centre, and the Council takes a share of income from work obtained from the north west region. There are arrangements at five year periods for a fundamental Best Value review of the Partnership.

  CAPITA also has to provide at least 500 additional jobs over a five year period and a prestigious environmentally office block in the centre of Blackburn to house 1,000 staff. This is a major contribution to the town centre redevelopment, injecting an additional £10 million of spending power into the town centre economy.

  Already over 100 new jobs have been created and the 500 target is looking rather modest.

  It is worth commenting on the processes from an initial concept of such a partnership to turning it into reality.

  The Council is strongly committed to getting value for money and maintaining the highest levels of probity.

  Nevertheless the procurement processes, which I know the Government is looking at, makes for long timescales and considerable "at risk" investment, for, usually, several private sector potential partners, only one of whom (and sometimes none) will benefit from an eventual partnership contract. Whilst this is a commercial risk in any procurement or tendering situation which rightly has to be borne by the private sector, the overall effect must be an increased cost to the public sector at the end of the process. Therefore any streamlining of the process whilst maintaining appropriate safeguards must be of mutual benefit.

  However, the Council feels that a partnership like ours with CAPITA, which reduces support costs and meets many other Council objectives such as improved performance, regeneration and other local social targets, is very beneficial to local residents and worth the effort to surmount the present bureaucratic safeguards.

Councillor Bill Taylor, Leader of the Council

Phil Watson, Chief Executive

November 2001

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