Contractors
A question of contracts
Some local authorities have made the decision to contract out their parks management and maintenance functions, while others have kept the service in-house. Each method of service delivery comes with its own set of benefits and challenges. Martin Hyde of Lewisham London Borough and Tony McKenna of Newcastle City Council debate the issues.Lewisham entered into a Private Finance Initiative style of contract, which operates for 10 years, with Glendale in February 2000. The contract set out to transfer the entire parks section, with Glendale providing a combined parks management and grounds management service for all the borough’s parks. The works covers routine operations such as grass cutting, pruning, planting, litter clearance, cleaning, building and infrastructure maintenance, park keepers, security, events and other aspects of parks management.
Under the agreement Glendale receives a unitary payment for both the service and the Council’s use of transferred assets. The payment is made in monthly installments and varies from year to year as the service varies. As part of the agreement Glendale carried out capital works to the value of £1.5 million to be undertaken in the first three years of the contract. The outcome of the agreed works is and will be monitored to ensure that it meets the agreed specification. Penalty clauses within the contract impose fines if the works are not carried out satisfactorily.
The contract is structured as a Private Finance Transaction (PFT) in order to ensure that any inward investment does not require credit cover. The contract has been drafted so that it meets the contract structure test and requires that:
- There must be a transfer of risk to the contractor;
- Payments must be performance related;
- There must not be a separate payment for capital investment;
- There must be a rigorous monitoring system in place.
This contractual arrangement has allowed the Council to establish a small but experienced client team to oversee and monitor the contractor. The client team has retained a strategic role, which has helped to lever in over £4million of external and internal capital funding since 2000, in addition to the £1.5 million that came with the contract.
Glendale has signed up to the principles of Best Value. Efficiency savings have and will continue to be put back into the service to make on-going service improvements.
The contract has helped to stabilize the client’s revenue budget and Glendale provides a high quality service for a mean average cost (just under £3million per annum – contract and client), based on the London authority average spend for parks.
The satisfaction rate for parks, measured by an independent Annual Residents Survey, has reached an all-time high of 52% of residents saying parks were good to excellent, being 4% above the London average (2004), a year on year increase from 1998 when the satisfaction level was a lowly 32%.
The annual Green Flag Award scheme is designed to recognise and reward standards of excellence in parks and green spaces. Lewisham has three Green Flags and hopes to secure an additional flag this year in addition to retaining those already held.
The Council enters the London in Bloom competition and following recent successes, including ‘most improved borough’, in 2001, won the prestigious ‘London Borough Trophy’ in 2003. As a result of winning this top award Lewisham was nominated to represent London in the Britain in Bloom finals for 2004.
Martin Hyde, London Borough of Lewisham
Strategies. What’s the point if you don’t implement them? In our world of networking, partnerships, community plans, local public service agreements, balanced scorecards and whatever the next piece of quango-inspired gobbledegook, we need more simplicity. Simplicity of thought and simplicity of action.
And that’s what a local authority parks management approach brings, and I’m not confusing simplicity with simplistic. We develop our strategy with our stakeholders. Our management teams are key stakeholders and if they believe in what the strategy says, they will make it happen. And if your coal face workers, the park keepers, rangers and grass cutters believe in it and have been part of it, they will make it happen too.
Parks management is a different kettle of fish to outsourcing IT or financial services. There is passion and emotion involved, ecology, health…people for God’s sake. A financial transaction to outsource parks management dilutes the relationship between the service and the people responsible for delivering it.
That’s my rant over with. Yes I’m sure there are excellent people working for grounds maintenance companies who are eminently capable of delivery parks management. I bet most of them come from a local government background. I bet most of them have had their continuing personal development paid for by council tax payers. And I bet that most of them still have at least the vestiges of the public services ethos that parks and green spaces should be provided by local authorities. Perhaps they even agree that it should be a statutory service.
So the question forming in my mind is why bother? You may save some money and tick a box in the CPA, and RPA boxes (try making an anagram from those two acronyms!) but consider what you lose – the personal commitment, the emotional connections, the intimate knowledge of sites, services and people.
You can’t replace that with an outcome-based performance management contract or whatever the mystical title is we give to such relationships. These contracts will be predicated on money, not on the premise that it is a philosophically correct way to manage parks.
Local authority park management isn’t broken, it doesn’t need mending but it does need support and nurturing. Many of us are experts - as good as and better than many consultants and strategic advisors. We know our business better than the Audit Commission. All we need is some collective self belief that we can deliver…and we will!