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Regular feature: Issue 543 16 Apr 2010

Team work: consultant sees councils joining forces for difficult journey ahead

Consultant WSP is using its experience of contracts with more than one local authority client to spread the word on how collaborative procurement can be made to work. John Nicholson, director at WSP for local government services, tells LTT 's Lee Baker more...

The Future of Local Transport Delivery

There is a drive for local authorities to team up for wider contracts covering wider geographical areas and offering a wider range of services. But local government needs to take stock to make such collaborative arrangements work in the view of consultant WSP.

John Nicholson, WSP’s director, local government services, says that there will need to be radical changes in the way that the public sector provides services in the future. “The concept of delivering services in silos in tightly defined administrative areas will go out of the window.”

WSP already has extensive experience of collaborative contracts that involve more than one client.

Two years ago, when Wokingham Borough Council entered into a contract with WSP for highways and transportation consultancy services, West Berkshire chose to also use the contract – something which the OJEU notice had provided for.

Last month, Hampshire County Council, on behalf of Improvement and Efficiency South East, a regional improvement and efficiency partnership, let a four-year framework contract with WSP and three other providers for consultancy to assist the delivery of local transport plan projects. The framework can be used by all local authorities in South East England. Authorities can use it for ongoing term consultancy or alternatively just for one-off projects. “Those smaller authorities that want a top-up service will still get better rates under this arrangement.”

WSP has also been involved in collaboration on the delivery side, forming part of a core team on Northamptonshire’s ‘capital programme delivery unit’ that drives delivery of the programmes of the county and district councils, and two development corporations.

Nicholson believes that over the next few years such contracts will become commonplace, whilst councils re-trench and become more strategic, employing fewer technical staff directly. “Local authorities may decide that they do not need to have their own transport planners working for them on a day-to-day basis. They may say ‘let’s have project managers or asset managers to make the most of our contracts and our property, rather than transport professionals.’”

The core team of Northamptonshire’s capital programme delivery unit – responsible for ensuring that £19m of capital works in 2010/11 are delivered on time and to budget – is drawn from the county council, as well as a WSP/May Gurney joint venture.

Nicholson says that collaboration is necessary to deliver savings on the scale necessary, given the likelihood that the funding for local government will be reduced by at least a fifth. “The majority of the savings that have been delivered over the past five years have been in back-office services. There’s a consensus now that local authorities are going to have to reorganise frontline services if they are to limit the impact of at least a 20% reduction in their revenue budgets.

“They’ll need to look at their staffing, their contracts, and their property, and maximising the value of their spending.” On contracts, local authorities will get improved rates by joining together.

However, he cautions that “collaborative working in itself does not necessarily generate benefits. It can be inefficient if you don’t get the governance arrangements right”. With this in mind, WSP organised a workshop with clients to discuss the requirements for successful collaborative arrangements.

“We wanted to facilitate a sharing of experience: what works, and what doesn’t work?” The consensus among those who attended the event was that from the outset, the scope of contracts needs to be clearly set, and effective and transparent governance to be put in place, where each authority is able to put the collective interest before their own self interest.

With the Wokingham contract, Nicholson says West Berkshire entered into a simple legal agreement with Wokingham to provide them with the same contractual safeguards as if they had entered into a contract with WSP – but without Wokingham being legally liable for WSP’s performance.

Wokingham remains the contractual client but, once work is commissioned, West Berkshire project managers can deal directly with their counterparts in WSP. “These arrangements minimise bureaucracy whilst protecting both councils’ interests.”

Furthermore, the contract combines  so-called  vertical integration – collaboration between councils  – and horizontal integration – reducing duplication between private and public sector partners.  All members of the integrated management and delivery teams  of the Wokingham highways alliance between the authority, WSP, and the works provider, can work for other authorities who join the contract – irrespective of their employer.

The ability of councils to trade may make such collaborative arrangements increasingly attractive, Nicholson envisages. “With the reductions in funding, there will be lots of authorities trying to avoid making people redundant and hoping to go into some kind of joint venture arrangement.”

Trafford and Stockport councils, for example, are launching a partnering arrangement using the former’s direct labour organisation and the latter’s wholly-owned company Solutions SK, which will seek work for other authorities.

However, whilst he says that this is an effective way of using spare capacity within an authority, “this cannot be a panacea. Every authority can’t carry out work for others; there will have to be some rationalisation”. Hence the drive for collaboration: to allow councils to get a bigger bang for their buck. This applies even for those councils with less demand for services, as in the case of the contract with Improvement and Efficiency South East.

South East authorities that only want occasional consultancy can also benefit from better rates, and they save the cost of entering into procurement. Local authorities on the Midlands Highways Alliance, meanwhile, save on the cost of procurement on medium-sized local transport projects. WSP has expressed an interest in preparing the business case for another collaborative framework contract, in North East England.

Authorities such as Surrey County Council are considering going even further, and instead of just having collaborative procurement, sharing resources and systems in regional joint contracts.

The workshop that WSP facilitated also pinpointed a need for one public body within a collaborative grouping to take the lead, without having primacy over other partners, and for ways of collaborative contracts to accommodate local needs by allowing variations. The participants also suggested that having representative governance arrangements, so that there was clear accountability and transparency, was important – something challenging, the larger the area that contracts cover.

Nicholson believes that collaborative contracts do not necessarily have to involve a certain amount of “pain,” as Alison Quant, president of the Association of Directors for Environment, Planning and Transport (ADEPT) has said.

“If the client side has a clear understanding of how they will work together, and that that can carry on even if there are changes of personnel, then they will not be working in isolation from each other, but working as one team. That doesn’t have to involve a complex set of manuals and protocols.” He acknowledges, however, that collaboration means “councils giving up some control and power, for the greater good”.

This could be accepting the majority decision on which street lighting lamp to purchase, or that the impacts of climate change should be the priority for a transport consultant over the coming year.

The forthcoming reductions in public spending require compromises to be made, says Nicholson. “Why not standardise bollards? There’s an imperative to do this. But there is a question mark over whether the appetite for change is there.”

However, having group decisions on transport investments and work conflicts with the push to make the users of services more involved in decisions on how budgets are spent. Nicholson acknowledges this, but insists that the two can be reconciled. “Councils participating in collaborative contracts may have different priorities; but they must be prepared to make compromises – that’s democracy.” 

Engaging with the electorate so that they are more involved in decisions on how money is spent in local areas will become more important, not less, he predicts – particularly given that over the next few years services will not only be commissioned; some will have to be “decommissioned”.

 “Current investment decisions tend to be made against formulaic evaluation frameworks that assume knowledge of what the public want. But as resources for public services reduce, people will justifiably increasingly challenge whether their taxes are being spent in the best way.” This will put the onus on transport professionals to make the wider case for transport investment, as opposed to focusing on the journey time, road safety and other transport benefits, he suggests.

Durham County Council, a ‘Total Capital’ pilot authority, reported that it is constrained by being unable to make the economic development case for a new road.

Nicholson says: “The value of a streetscape improvement may be challenged by taxpayers on the grounds of ‘what was wrong with the old street’. But their reaction could be very different if they were aware of the wider benefits: regeneration; reduced fear of crime; fewer trips and falls; whole life cost savings.”

Crucial, he believes, will be establishing what a citizen would be prepared to give up in exchange for something that they want. WSP has had a role to play in how to ensure that reduced budgets are more closely aligned with what the public wants.

The consultant undertook the work for Surrey County Council’s ‘zero based’ budget on subsidised passenger transport services last year, which went out to a three-month consultation. This sought views of the public on the principles that a subsidised network should be based upon, and a fundamental review of the subsidised network, as opposed to a piecemeal removal of subsidised routes purely on the basis of cost rather than any transport rationale.

“This was an early example of an authority saying, ‘we’ve got hard decisions to make, let’s not dodge them, but let’s get out there and involve the public in those decisions,’” says Nicholson. The alternative, he suggests, is to make cuts that are not based on an assessment of the greatest transport needs.

“Capturing what the public really wants is the biggest challenge. It’s crucial that decision-makers can find out what the public is prepared to give up, as well as what is most important to them.” He says that the ‘Planning for Real’ method of community consultation is a way of establishing whether, if more money was spent on a specific improvement to, say, street lighting, a local community was prepared to spend less on something else.

Only once the spending review for the period beyond 2010/11 has been held after the General Election, will local authorities know how much money they will have for their 2011/12 budgets.

Nicholson, who chairs the Association for Consultancy and Engineering’s sector interest group on local government, calls on transport professionals to put forward cogent arguments for investing in transport, emphasising that, whilst there will be less money from Whitehall, the ‘Total Place’ agenda means that there will be money generated locally, through property asset rationalisation, for example.

“If different public bodies such as the police and health authorities can share property with local authorities, this will allow some necessary capital investment to happen.”

Another option is for councils to “offload responsibility” for transport assets, he says: tolling could provide income for maintenance; local residents could be given responsibility for maintaining their own streets.

He believes that the state will in future have to do less, regardless of whichever party or parties form the next Government.

“If you say to people that severe winters will only occur every five to ten years, and that paying to gear up for that every year would mean giving up something else that people want, they might well then decide it would be better to become more self-reliant – buying snow chains or tyres, or getting decent home-working arrangements in place.”

He says that, whilst there will be challenges given the likely reductions in public spending, it will be “an exciting time” to be in the local government sector.

“WSP is a resilient business, with half our work coming from the private sector, half from the public sector. Within the public sector side, we have a good mix of providing both frontline services and transport planning services.”

“There will be an ongoing need for local authorities to manage their transport networks.” 

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