Appendix A

Advantages and Disadvantages of Future

Procurement Options for the Delivery of Open
Space/Parks Maintenance in the Borough
General Characteristics of Grounds Maintenance Work that
will impact on all Procurement Options;

Seasonality summer peak v winter trough requiring summer and

winter hours and summer temporary staffing impacting on staff skill
levels and retention
One-off work unpredictability in supply results in diversion of
contract staff to more lucrative one-off works impacting on routine
operations
Climatic change extended growing season with more growth and
poorer ground conditions may require changes in specification.

5 Procurement Options for future delivery of Service currently

indentified:Option 1 Out-Source/Contracting Out
Advantages

Disadvantages

Key Issues

Funding limitations beyond Given the tenders submitted in 2003,

In theory, lower overall rates agreed section 106 monies changes to TUPE regulations on
pensions and common terms and
and overall contract costs
conditions and the competitive pricing
than under any full or partial Less control, influence,
of the contract by Kier, it may not be
in-house arrangements could responsiveness and
flexibility than some of the unreasonable to anticipate a
be anticipated due to the
significant increase in tendered costs.
economies of scale / lower other alternative
procurement options
Some degree of increase to reach the
overheads etc
point where a contractor achieves a
healthy but not excessive level of
Easier to demonstrate VFM Potentially less well
trained, less specialist, less profit would best serve the public - in
as subject to open
motivated staff
terms of adequate performance being
competitive tendering
realistically sustained. This increase in
process
Risks adversarial
costs is likely to occur without any
relationship focussed on increase in the specification. This
Requires fixed budget,
costs not on quality of
therefore some protection
would need to be accommodated in
service
from drive for efficiency
the medium term financial strategy.
savings effecting service
provision
Unless contract
Alternatively - if tenders come in a
specification sufficiently
long way above the existing budget
Maybe easier for contractor tight risk of cost overruns and increases in cost cannot be
to make capital investment from unforeseen
accommodated, then significant
for new
further reductions in service delivery /
variations.
machinery/technologies
maintenance frequencies would be
required.
If multiple contracts let for necessitated.
different areas negative
Transfer of risk to Contractor
095A

Appendix A
for operational issues i.e.
performance linked to
machinery
efficiency/breakdown,
staffing issues, insurance
and health and safety
matters.

impact on ability to
manage and monitor
performance

In house monitoring resources to

ensure quality and performance are
maintained at the required level would
need to be reviewed and likely
increased.

Option 2 Using Kier

Advantages

Disadvantages
Key Issues
Time and costs of retenderingFunding
beyond The full legality of this approach

limitations

Potentially lower cost than

through re-tendering

agreed section 106 monies against EU procurement legislation

would need to be established and the
justification for adopting this approach
Negative perception of
will have to be stronger than for the
existing contract
other more competitive arrangements
performance amongst
so it can stand up to external audit.
some parties.

Opportunity to add in new

quality and performance
controls and penalties

Possible continuation of
existing performance
despite increased rates

reduced re: overheads,

infrastructure, plant and
equipment and staff cover.

Reduced mobilisation and

Implementation Time.

The past most significant cost

advantage to an external contractor of
operating a two tier workforce will be
removed by the new TUPE rules and
regulations that will apply.

Strong external scrutiny

likely of justification for not
competitively tendering the Kier may also wish to increase costs
to avoid future losses and to make an
Possible synergy and
works.
operating profit.
Economies of scale when
combined with existing areas Possible continued use of
In house monitoring resources to
of contract.
sub-contractors for
specialist grounds activities ensure quality and performance are
maintained at the required level would
Knowledge of Borough and i.e. tree care and
need to be reviewed and likely
Operating Practices
landscaping.
increased.
Transfer of risk to Contractor Risks adversarial
for operational issues i.e.
relationship focussed on
performance linked to
costs not on quality of
machinery
service
efficiency/breakdown, staffing
issues, insurance and health Unless revised contract
and safety matters.
specification sufficiently
tight risk of cost overruns
from unforeseen variations

095A

Appendix A

Option 3 Parks Trust

Advantages

Disadvantages

Key Issues

Guaranteed income beyond Loss of Council control and How integrate with existing urban
life of section 106 monies
responsibility over public open space areas?
through ground rents giving open spaces
Need to consider how Parks Trust
an increased budget.
Limited ability of Council Board would be accountable to
citizens it serves?
Ability to attract additional
and citizens to influence
funding via Charitable status. local priorities.
How would standards be monitored
and enforced to ensure that Parks
Ability to deliver enhanced Transparency and
quality of maintenance of
Accountability of approach Trust delivered required outcomes?
open spaces
and actions taken to
citizens and other
Possible redistribution of
stakeholders.
council tax funds to elevate
standards of inner urban
Saleability of option to
open space areas
residents of new
developments effected to
No costs/time to CBC for
make additional payment
tendering
over and above council tax
for enhanced service.
Transference of all risk
including public liability to the Existence of dual standard
Trust/Operator
of ground care for new
suburban and existing
Perceived current good
urban neighbourhoods and
practice Public/Private
management of the public
Sector approach by Central reaction.
Government
Open Space areas within
Economies of Scale and
Urban Neighbourhoods
consistency of approach
requiring increased
across Borough.
investment and
improvement remaining
with the Council with
limited resources to effect
necessary changes.

095A

Appendix A

Option 4 Joint Venture

Advantages

Disadvantages

Key Issues

Costs and resources require to How integrate with existing

work up and agree specification urban open space areas?
and undertake tender exercise
How would standards be
Shared control i.e. 50:50 or
Retention of control and
monitored and enforced to
influence over local priorities lesser share with other partner, ensure that JV delivers required
probably linked to money
and service provision
outcomes? If in-house .. In
invested
house monitoring resources to
Increased capacity
ensure quality and performance
Possible requirement to
are maintained at the required
Sharing/Spreading of Risks contribute additional finances
level would need to be reviewed
beyond agreed section 106
with partner
and likely increased.
monies
Access to increased
resources including specialist Potential differences in
objectives of two partners
staff and technology
Ability to deliver enhanced
quality of maintenance of
open spaces

Potential imbalance in levels of

Availability of increased
expertise, investment or assets
resources to invest in
maintenance over and above brought into the venture by the
agreed section 106 monies. respective partners
Ability of Council and citizens Potential for differing cultures
and management styles
to influence local priorities
resulting in poor integration and
co-operation
Perceived current good
practice Public/Private
Sector approach by Central Existence of dual standard of
ground care for new suburban
Government
and existing urban
neighbourhoods and
Economies of Scale and
management of the public
consistency of approach
reaction.
across Borough.
Open Space areas within Urban
Neighbourhoods requiring
increased investment and
improvement remaining with the
Council with limited resources to
effect necessary changes.

095A

Appendix A

Option 5 In-house Service

Advantages

Disadvantages

Greater Control, Quality,

Flexibility, Responsiveness

Funding limitations beyond

agreed section 106 monies

Availability of staff resources

in emergency situations
Overheads recharged to the
waste management service
and costs of the depot
provision may be spread
more widely
More flexibility to incorporate
unforeseen variations to the
service specification to limit
cost overruns.

N.B. A highly detailed final inhouse costing exercise utilising

specialist support would need to
Possible higher costs as all
be undertaken before making a
manual workers would need to definite decision to go down this
be placed on comparable footing procurement route, to determine
to manual workers within the
its affordability.
existing contracted waste
management service.
N.B. Unless fully sourcing the
grounds contract in-house can
Council will require a depot
be shown to be much more cost
facility and there are likely to be effective than any alternative
significant other initial costs of options, an in-house bid may
setting upThe council
have to succeed against
overheads recharged to the
external contractors in a
grounds service would be likely competitive tendering process
to be higher than those currently
of Kier.
In house management and
monitoring resources to ensure
The authority will bear all the
quality and performance are
risks re: equipment, staffing inc maintained at the required level
sickness cover, insurance and would need to be reviewed and
health and safety issues / all
likely increased
ownership / leasing of the
equipment etc.
Lack of synergy with existing
street scene contracted services
and likely detrimental effect on
existing contractor to end of
contract in 2013, with respect to
performance, goodwill and
desire to improve.
Lack of Economies of scale to
make most efficient use of
equipment and manpower
resources.
Limited opportunities for
investment in new equipment
and technologies and in staff
development.
Increased risk of changes in
service priorities and/or delivery
detrimentally effecting overall
performance of service

095A

Key Issues