HERTFORDSHIRE COUNTY COUNCIL
COUNTY COUNCIL
TUESDAY 12 OCTOBER 2010 AT 10.30 A.M.
EXECUTIVE REPORTS TO COUNTY COUNCIL
EXECUTIVE MEMBER FOR RESOURCES AND ECONOMIC WELL BEING
1 Overview
1.1 Efficient and effective use of resources is key to maintaining economic well being for Hertfordshire
1.2 This report provides confirmation of the work undertaken within the resources portfolio and an overview of current activity relating to the economic well being – all important to our vision of Hertfordshire as a county of opportunity.
2 People
Review of Hertfordshire’s Employment Package
2.1 Work is being undertaken to review Hertfordshire’s employment package. The target for savings is 4% of the relevant pay bill (which is currently approximately £7.4m pa).
2.2 Negotiation talks between the council and the recognised trade unions began in March 2010 to reduce the following key areas:
· sick pay
· fringe allowances
· other allowances (for example overtime)
· excess travel (disturbance payments)
2.3 Whilst a provisional agreement was reached on some areas of the package, the trade unions have taken the view that neither sick pay nor fringe allowances could be changed through agreement at local level as they form part of a national agreement dating back to 1997. As such, Unison, the lead trade union in the negotiation process, has lodged a formal ‘failure to agree’ with the council.
2.4 Meetings have taken place with Hertfordshire County Council senior managers, elected members and Unison to look at how we might resolve our differences and reach an agreement that is acceptable to all sides and which delivers the required level of savings. The next stage, scheduled for this month will involve meetings with Regional Unison officials.
Senior Managers Terms & Conditions
2.5 A review of terms and conditions of employment for senior managers commenced in June 2010 with the intention of identifying cost savings as well as aligning senior manager contracts with the changes proposed for the wider employee group. The review applies to the top 150 managers at Hertfordshire including Chief Officers and the Chief Executive.
2.6 Managers will be consulted on changes to their sick pay and lease car arrangements as well as a revision of their employment contract. Managers will then be asked to volunteer and sign their new contracts during December 2010, with the new terms commencing from 1st June 2011.
Management de-layering
2.7 The Management de-layering project aims to deliver more efficient and effective management structures across the organisation. An organisational-wide target of saving 25% of management costs at grade 'M4' and above has been set. This will deliver in the region of £10m of efficiency savings. Significant progress has been made in designing new structures that reduce the number of posts in-line with this target, with over £4m of savings firmly identified. Managers have been provided with new guidance on job-sizing and job roles, to ensure that the number of managerial layers is significantly reduced and that roles are sized and graded appropriately as they design new organisational structures.
3 Property & Technology
3.1 The restructured Property Teams are taking shape following internal interviews and the remaining vacant positions are currently out to advert. A new Assistant Director (Property & Technology) has been appointed to be in post in December.
3.2 The Council is now accelerating work on the capital programme and improved building management in order to deliver financial and carbon reduction targets set earlier this year.
3.3 Detailed work is being undertaken with existing property contracts: Lambert Smith Hampton to speed up capital receipts; Mouchel and Mace to ensure improved value for money and scale back their input as we build better capacity in the teams and prepare for the procurement of new contracts in 2012.
3.4 The Council is discussing with district councils and the police authority the potential opportunities for sharing property assets and realising synergies and savings. This is early days for this exciting project but one that could deliver transformational change in key service areas.
3.5 The transfer from Lotus Notes to Microsoft Outlook is currently taking place as part of efforts to focus improvements on core IT systems and save costs for the council. This project will ultimately save the Council £300k per year.
3.6 The design and technology for Hertfordshire's "Open Data" portal has been delivered and implemented. The new service to be launched in September 2010 will include details of all spend greater than £500, job titles with numbers of staff occupying each position, expenses claims, all new contracts and various other performance data sets for the public to view and scrutinise as part of this new initiative.
3.7 Postal scanning is also being introduced at County Hall to bring the site inline with Apsley and Stevenage. Teams and staff are being briefed ahead of the changes and are being asked to review business processes in order to identify better ways of working and increase productivity.
4 Finance & Contracts
4.1 Recruitment for the new Herts Finance Management team is currently taking place for internal staff affected by the restructure. A number of high profile posts are also being advertised externally. The revised structure for the Herts Finance service will provide clear accountabilities in relation to the delivery of improvements in both the speed and quality of reporting and year end processes.
4.2 A detailed action plan has also been put in place to ensure that the 2010/11 accounts are IFRS compliant. Work has commenced on processes to simplify the production of the statement of accounts including automation of the trial balances, associated notes and working papers from SAP. The routine production of the trial balance would also be a feature of ongoing monitoring processes.
4.3 HCC has selected the London Pensions Fund Association as the preferred bidder for delivery of pensions administration in Hertfordshire. This will bring to a close the long held contract with Serco for provision of these services. The new contract will commence April 2011 with all of the Serco pensions staff and two HCC pensions administration staff transferring to LPFA under TUPE provisions. The contract promises a better quality and better value proposition moving forwards. The bulk of the services provision will continue to be delivered from County Hall Hertford.
4.4 The two remaining bidders, Serco and Vertex, have presented their final proposals on how they intend to carry out the work specified in the contract. Their tenders are now being reviewed by the programme team and scored against agreed criteria to determine the preferred supplier.
4.5 A decision on the preferred supplier will be made early in October. It is anticipated that the contract will be formally awarded in November, after which there will be a 90 day consultation period with those staff who are in scope. .
5 Economic Well being
Labour Market
5.1 The claimant count for Hertfordshire increased in August 2010 by 290 (1.7%) from July. This brings the count to 17,735, which is 11.1% below the level of August 2009. The claimant count proportion has remained at 2.5% (calculated on new 16-64 basis for the working-age population).
5.2 The Stevenage proportion remained both at 3.9% and at 0.3 percentage points above the UK rate, which was also unchanged. Other claimant count proportions were 2.9% for the East of England, 4.0% for London and 2.4% for the South East. In all these regions and in the UK the claimant count increased (none of these figures are seasonally adjusted).
5.3 More encouraging news is that there were 4,926 Jobcentre Plus live unfilled vacancies in August 2010. This figure is 1,203 (32.3%) higher than in July and 29.5% higher than in August 2009. It is, however, still significantly below pre-recession norms, despite measures taken to increase the advertising of jobs through Jobcentres.
5.4 There are currently 3.6 claimants to every Jobcentre Plus vacancy. This is a better ratio than in any month in 2009 or 2010 .However, the figures of 1.92 (Aug 08) and 1.46 (Aug 07) put this data into context.
Hertfordshire’s Local Enterprise Partnership
5.5 The proposal for a Hertfordshire LEP was submitted to Government for consideration on 16 August, ahead of the 6 September deadline and was one of the first in the country to be submitted.
5.6 The proposal made a strong case for a LEP on the basis of the size, complexity and diversity of the Hertfordshire economy and that Hertfordshire has an existing partnership in Hertfordshire Works in which to build an effective LEP quickly. It also indicated how a Hertfordshire LEP would work with neighbouring areas to address common economic issues.
5.7 The proposal had the support of all local authorities in the county as well as academic institutions, business representatives and major businesses such as Tesco, T-mobile and GSK.
5.8 Feedback on the proposal is expected by mid October. LEP proposals will need to be signed off by the BIS and CLG Secretaries of State. It is likely that some partnerships will be given the green light to work up a full LEP whilst others will need more time.
5.9 Subject to Government approval of a Hertfordshire LEP, work has begun to develop a more detailed plan for the LEP, including future funding and governance arrangements. It is proposed to bring together prospective LEP partners to discuss the way forward later in the year.
Regional Growth Fund
5.10 On 23 July 2010 the Government launched a consultation on the proposed objectives and design of the Regional Growth Fund (RGF).
5.11 The fund has two main objectives:
1. to encourage private sector enterprise by providing support for projects with significant potential for economic growth and creating sustainable private sector employment
2. to support in particular those areas and communities that are currently dependent on the public sector to make the transition to sustainable private sector led growth and prosperity
5.12 The Government announced that it would allocate £1bn over the course of 2011/12 and 2012/13 and the first bidding round is expected in December, although this could possibly be brought forward. It is expected that any bids should be of at least £1million. There is no prescription on the applicant organisation, but LEPs are suggested as the preferred model of public-private organisation to lead on applying for funds.
5.13 In terms of Hertfordshire, it is likely that the first objective is likely to yield the greatest chance of success in terms of large, capital based, infrastructure projects.
5.14 A draft HCC response to the consultation was submitted on 6 September that put forward the case for the need for the RGF to prioritise support for projects that create additional private sector investment and employment and not just those areas (outside the greater South East) that are more dependent on public sector investment and employment.
5.15 HCC has begun a dialogue with district councils to determine the potential for a Hertfordshire RGF bid based on the following criteria:
• demonstrate a clear strategic need for investment
• are able to deliver over 2011-13
• can secure significant private sector investment
• are likely to generate significant job creation.
5.16 It is expected that the first bidding round will be later this year or early 2011.
5.17 Further clarity on the above issues is expected in the form of a White Paper, which is likely to be issued near to the Comprehensive Spending Review (CSR) 2011-15 announcement on 20 October. The White Paper is expected to cover Local Enterprise Partnerships, the transition from RDAs to LEPs, growth incentives, planning issues and RGF.
Economic Participation 2010/11 Programme
5.18 Following the Coalition Government’s decision to review the funding available to Regional Development Agencies, EEDA has now reduced the amount available to Hertfordshire under the 2010-11 ‘Ready for Enterprise’ programme. The original grant of £761,767 plus £22,000 additional management element to reflect EEDA’s request that the programme be run as an ESF pilot) has been reduced to £721,272 plus £22,000 as before.
5.19 This reduction, together with the delay in EEDA announcing the final funding has meant that the outputs from the programme have had to be reduced and re-profiled with some work taking place in the 2011-12 financial year. A contract for the delivery of the programme has now been signed with YTKO, who are delivering a number of similar programmes across the region.
Hertfordshire Strategic Employment Sites Study
5.20 One of the five key objectives within the new Hertfordshire Economic Development Strategy (HEDS) is ‘Providing quality locations and infrastructure’ This is central to the strategy’s aim to grow the Hertfordshire economy by attracting new, knowledge-based jobs particularly through foreign direct investment and links to the Invest Hertfordshire website which promotes the county as a good place to do business. Priortiy 1 within the HEDS Action Plan commits the Hertfordshire Works partnership to work with local planning authorities and EEDA to identify and bring forward a small number of strategic employment sites in high profile prestigious locations and served by sustainable transport options.
5.21 To take forward this priority, a study, part funded by EEDA, Hertfordshire County Council and seven of the ten district councils will be commissioned to look at the county’s existing employment sites, the extent to which they could fulfil the role of strategic employment sites and the need to identify and bring forward a small number of new sites linked to Hertfordshire’s main sectors and clusters. It is anticipated that this work will take place in the autumn with the results available in the New Year.
David Lloyd
Executive Member for Resources and Economic Well-being
October 2010
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