MIDDLESBROUGH COUNCIL

EXECUTIVE REPORT

Direct Payment Support Service – Exemption from Standing Orders

Executive Member For Resources: Nicky Walker
Executive Director for Social Care: Jan Douglas

17th December 2009

PURPOSE OF THE REPORT

1.To seek an exemption from Standing Orders to allow for an extension of the current contract for Direct Payment (DP) Support Services held by A4e for a period of 6 months.

SUMMARY OF RECOMMENDATIONS

2.That approval is given for exemption from Standing Orders.

IF THIS IS A KEY DECISION WHICH KEY DECISION TEST APPLIES?

3. / It is over the financial threshold (£75,000) / 
It has a significant impact on 2 or more wards
Non Key

DECISION IMPLEMENTATION DEADLINE

4.For the purposes of the scrutiny call in procedure this report is

Non-urgent / 
Urgent report

BACKGROUND AND EXTERNAL CONSULTATION

5.Middlesbrough Council awarded a contract for the provision of a Direct Payments Service to Action for Employment Ltd (A4e) on 1st April 2005. This contract is due to expire on 31st March 2010.

6.The contract price is based on fixed bandings for the duration of the period, which are detailed below:

For up to 100 service users£200,695 per annum

For up to 200 service users£270,000 per annum

For up to 400 service users£325,000 per annum

For up to 800 service users£450,000 per annum

For up to £1,600 service users£600,000 per annum

7.The number of Direct Payments currently being provided is in excess of 550.

8.The contract includes the following elements of support to those clients who choose to receive a Direct Payment and purchase their own support:

  • Employer Support – recruitment, selection and HR support.
  • Payroll Support – payment of wages, issue of contracts of employment etc.
  • Financial Monitoring – tracking and reporting of DP accounts.

9.The opportunity to reconsider the current configuration of the DP support presented itself via the process of re-tendering. Allied to this, several quality issues had arisen throughout the period of the contract with A4e.

10.As a result, it was decided that financial monitoring was an activity that could be best delivered (VFM and quality) in-house. There is already a financial services function within Social Care that undertakes a similar service for Social Care users who are unable to manage their own finances.

11.Following consultation with DP clients, it was decided that the remaining services covered by the contract could be delivered as separate services. The tendering process for the services below therefore commenced on May 2009:

  • Payroll Services to DP clients.
  • Employer Support to DP clients.

12.The number of tenders received by the deadline date was disappointing, representing the fact that there is a niche market for the services in question. In fact there was only 1 tender submission in respect of the Employer Support Contract and this was from A4e (with whom there has been quality issues). In respect of Payroll Services, 3 submissions were received and these are not affordable (initial investigation suggests that economies of scale have been lost in separating the 2 services).

13.In light of the inadequate number of tender submissions and their cost, there is now a need to undertake a new tender exercise for a combined Payroll and Employer Support Service. As part of this exercise, specifications will be reconsidered with a view to minimising the cost and maximising the value for money of any new contract. The tender process itself is anticipated to take approximately 6 months and the re-specification of the services a further 3 months.

14.It is not therefore anticipated that any contract award will be made until September 2010. The current contract with A4e ends on 31st March 2010 and an extension to October 2010 is therefore required to ensure that services are maintained during this time.

EQUALITY IMPACT ASSESSMENT

15.Not applicable

OPTION APPRAISAL/RISK ASSESSMENT

16.Option 1 – Do not approve exemption request

This will result in no DP support being available for the period April 2010 - October 2010. There are currently approximately 550 individuals employing over 750 individuals who are dependent on this service. In addition, the number using a DP is expected to grow by approximately 20-30 per month from January 2010 onwards.

17.Option 2 – Agree to exemption request

This will allow for the re-tender of the services within a reasonable timescale and for the specification for these services to be properly considered.

FINANCIAL, LEGAL AND WARD IMPLICATIONS

18.The anticipated cost of extending the current support service for 6 months is £225,000 and will not create any additional financial pressure in 2010/11.

19.The Council has a legal responsibility to promote DPs and to promote the support outlined in this report to those Social Care users who use them.

RECOMMENDATIONS

20.That approval is given for Option 2 – exemption of standing orders.

REASONS

21.Granting the exemption will allow for:

  • Value for money and cost opportunities to be maximised.
  • Continuity of service for DP clients.
  • Stimulation of the market across the Tees Valley and consideration of jointly procured services with other Councils.
  • Proper reconsideration of service requirements and quality expectations.

AUTHOR: Tony Parkinson

TEL NO: 729036

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Address: 3rd Floor, Civic Centre

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