CV One Service Review - Progress Report - Coventry City Council

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Briefing Note
Economy, Regeneration and Transport Scrutiny Board (Scrutiny Board 3)
Date:
26 January 2011
Title:
CV One Service Review: Progress Report
Current Position Statement
Background
The CV One contract is due to expire in March 2012, but in light of the unprecedented
spending cuts now affecting all areas of the Council, it is essential that contracts are
reviewed to identify where cost savings can be achieved to deliver corporate savings
targets.
There were two options considered for the Council:
1. The first was to drive out further savings in services through the existing contract
with CV One and reconsider the scope and value of the contract prior to the
expiration of the current contract in March 2012.
2. The second option is to extract specific services from the contract prior to the
contract end date, together with the associated Council grant, re-designing the
services to deliver cost savings in house. This option will require further work to be
completed to review services, identifying their existing costs under the CV One
contract and model the likely costs, if these services were to be provided in house.
Initial work completed by officers indicated that the second of these options was likely to
generate greater opportunities for efficiency and savings.
Services Review
Following initial review of all service areas delivered as part of the CV One contract,
there is a clear rationale for bringing car park management and events back under
Council control.
Car Park Management
Based on the financial information both the cost and quality of delivering the service can
be improved if transferred back to direct Council responsibility. Typical savings of 20%
of some car park management activity costs can be sought through integrating some of
the activities, such as opening and closing car parks and cash collection, into other
contracts or services delivered by the Council.
In addition to these quick wins, bringing the operation and management of car parks
under direct control will have longer-term benefits by allowing the development and
delivery of a fully integrated parking strategy for the city centre, which will
present opportunities to develop income for parking, both on-street and off-street, in a

more structured and cost-effective way. Direct control will also create a greater incentive
than currently exists under the present arrangements to develop the quality of the asset,
both in terms of attracting customers and therefore income but also in minimising
future liabilities for large scale maintenance and repairs, something that is likely to
require significant capital investment over the course of the next few years.
In summary, this presents a good opportunity to reduce the costs incurred by the
Council in delivering the service, whilst at the same time increasing income and
providing better overall value for money. A precise assessment of potential cost savings
will be achieved once a full review of the financial data, staffing information and
contractual commitments has been undertaken.
Events
There is a clear rationale to centralise an events team and develop a city wide events
strategy. The Council will regain more control and management over events and
alignment with corporate objectives. The opportunity of generating income is increased
from concessions and sales, sponsorship and advertising packages and directly fed
back into the events programme.
2011/2012 should be an opportunity to review the event strategy for the City, to carry out
public consultation and create a new revitalised programme for 2012. 2011 would focus
on smaller community events as well as the Godiva Festival and would generate
savings on the existing events budget provided to CV One.
Therefore, officers obtained approval to proceed with the review of Car Park
Management & Events, with the purpose of the review to re-design the services, in order
to drive efficiency and cost savings, to regain control as a Council and to protect
frontline services by bringing these activities back in house.
Following the review, the CV One Business Plan for 2011-2012 providing details of the
service redesign and cost savings will be brought back to Cabinet for approval in March
2011.
Governance Structure
The governance structure is highlighted below:
PROJECT BOARD
Director of City Services & Development
Director of Finance & Legal Services
Assistant Director for City Centre & Development Services
Finance Manager (City Services & Development)
Leader (Coventry City Council)
Cabinet Member (City Development)
PROJECT LEAD
CV One Client Manager
PROJECT TEAM
CAR PARK MANAGEMENT
PROJECT TEAM
EVENTS
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Internally, governance is being managed by a dedicated multidisciplinary project team,
with members from the Special Projects Finance Team, Finance, Legal, HR and City
Centre & Development Services for Client Management support.
Financial Implications
The detailed financial work has now been undertaken to provide a view on the cost of
delivering car park management and events. In addition, a full analysis of the
overheads has been completed which will be combined to provide a comprehensive
baseline of the grant reduction expected from the £4.8m net contract value to CV One.
In light of the financial information that was provided during the detailed discussions
since in November, and also that provided on 17 December 2010 (namely establishment
costs and apportionments associated with the services to be brought back in house), it
is believed that there are still a number of financial issues to be to be reconciled.
As such, the Council has reserved the right to review the grant reduction figure. Further
discussion between CV One and Coventry City Council will take place during January
2011 to finalise and substantiate the grant reduction figure.
A detailed exercise is underway, in parallel, to determine how the Council would provide
car park management and events services in house. The in house option will be costed
and compared with the costs under the CV One contract to identify savings. The level of
potential savings identified will form the basis of the Council's final decision to issue a
notice to modify the existing CV One contract. This will be determined by formal Member
approval to execute the changes in March 2011. With services to then be brought back
in house from 1 April 2011.
Legal Implications
The CV One contract runs until 31 st March 2012 as approved by Members on the 31 st
July 2007. The contract terms enable a review of services to be undertaken and service
review modifications to take place as outlined in the report.
HR Implications
TUPE regulations will apply as it affects any employees who are wholly or substantially
engaged on services being delivered as part of the City Council Contract. A full HR
review has been conducted and an initial position on the staff transfers has been
provided by CV One as well as a full percentage split of time allocated to the individual
service areas. Further discussions will now take place to challenge and agree the final
list.
In order to continue the delivery of events and progress the Godiva Festival for 2011, it
has been agreed that the three specific events staff from CV One will be client managed
by Coventry City Council and based with the Communications & Events team. This will
take effect from the 17 January 2011.
Notification:
Formal notification was provided to CV One on the 23 December 2010, which stipulated
the grant reduction but also asked for specific requests to be actioned as part of the
review. This included:
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• The transfer of all rights to concessions at events, and street markets back to
the City Council
• A transfer of all the assets for events and car park management to the
Council, namely the festive lights, gingerbread house, hand held radios etc
• All premise licences held by CV One, which relate to the War Memorial Park
and the designated areas within the ring road need to be transferred to the
Council
• The Council has identified a number of areas in relation to the City Centre
BID, whereby it is possible that the Council's grant may be subsidising the
services provided to BID levy payers. The Council wishes to complete a more
detailed review of this issue and gain further understanding of the BID
arrangements, where these are pertinent to the Council's funding
arrangements, early in 2011.
Critical Path for Service Review and Implementation:
• Service, Financial and HR Reviews commencing from October 2010 in partnership
with CV One
• Formal notification to CV One in December 2010 on the variation of services from
the existing contract and the budgetary implications
• Service redesign and development of business proposals for delivering services inhouse
by the end of January 2010
• Financial and HR negotiations to commence from late January 2011
• The business plan to be completed by the 31 January 2011
• CV One to develop 2011-2012 business plan in light of service modifications, for
cabinet approval in March 2011. Relocation and alteration to client management of
Events staff to deliver the Godiva and wider events programme from 17 January
2011
• Staff consultation will commence from February 2011
• Modified contractual services from 1 April 2011
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City Services & Development Directorate
City Centre & Development Services
Jade Mosey
Senior Project Manager (City Centre Contracts)
Tel: 024 7683 2036
email: jade.mosey@coventry.gov.uk
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