ADVENTURE PLAY STRATEGY NEXT STEPS AND PROPOSED STAFF-LED MUTUAL

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1 Children s Services 222 Upper Street, London N1 1XR Report of: Executive Member for Children and Families Meeting of: Date Ward(s) Executive 27 th November All Delete as appropriate Non-exempt SUBJECT: ADVENTURE PLAY STRATEGY NEXT STEPS AND PROPOSED STAFF-LED MUTUAL 1. Synopsis 1.1 This report sets out the options and makes recommendations for the next steps in implementing the recommendations of Islington s review of adventure play. 1.2 The intention is to continue to prioritise an offer of adventure play in the borough, strengthen its quality, extend its reach, maximise the resources that are available to support it during a period of financial constraint. 1.3 This report additionally seeks pre-tender approval for the procurement strategy in respect of adventure play in accordance with Rule 2.5 of the Council s Procurement Rules. 2. Recommendations 2.1 To support the implementation of the proposed staff-led mutual for adventure play to be in a position to be able to manage and operate the six playgrounds which are currently operated by the council s Play and Youth Service from April 2016 if successful in a competitive tender. 2.2 To agree that the council provides support to the staff-led mutual in the ways set out at section 6 of this report. 2.3 To agree the Procurement Strategy to re-tender, through a transparent procurement process, the management and operation of the six adventure playgrounds currently operated within the voluntary sector from April To agree an annual investment in adventure play of 1.2million from April 2016 until March 2019 as a minimum, the details of which are set out in Appendix To delegate the key decision of the award of the contracts for adventure play to the Corporate Director of Children s Services, following consultation with the Executive Member for Children and Families.

2 3. Background 3.1 Adventure Playgrounds have been a key feature of play opportunities in Islington for 40 years, reflecting the need for children to have access to play in a borough with the second lowest level of open space per head nationally. There are twelve adventure playgrounds in Islington. Historically, six have been managed by the council s Play and Youth Service and six by providers within the voluntary sector. 3.2 The Council s Executive made children and young people a key priority in its budget for and in this context has maintained its investment in adventure play provision. One of the priorities of the borough s Children and Families Board in this period has been Maintaining Play, Youth and Leisure Opportunities for Children and Young People. 3.3 In the context of this commitment, between February 2011 and March 2012, the council undertook, with key partners, a large-scale review of its strategy for providing adventure play. The aim of the review was to develop a sustainable plan for the operation of Islington s adventure play offer from April 2013 in the context of seeking to build the quality and consistency of the offer to children and families in the borough. 3.4 The recommendations of this review were agreed by the Executive in May These were to: operate a tender to secure one operator to manage the six adventure playgrounds which had historically been managed by individual voluntary sector organisations; agree that the above arrangement be made under one contract for two years from 1 April 2013 with the option to extend for up to one further year; agree that the council would consider, either ahead of the 2015 or 2016 financial year, whether to retender the six playgrounds or to include all twelve in a larger tender; agree that, across all the above arrangements, that the core offer of adventure play supported by the council would continue to be free at the point of access; further secure the current land used for adventure play by establishing a Deed of Dedication which dedicates all the adventure playground sites as public playing fields specifically for the provision of children s play. This arrangement means that the council to is not able to develop or dispose of the sites without the agreement of a third party (Fields in Trust). 3.5 The contract to operate and manage the six adventure playgrounds in the voluntary sector was subsequently awarded to Islington Play Association on the basis set out in 3.4 above. 3.6 Performance against this contract has been monitored carefully and in the first year, this has significantly improved compared with the combined performance of the six sites operated by individual voluntary sector providers in the previous year. A summary of performance against this contract is attached at Appendix In the light of this, the contract with Islington Play Association has been extended by one year, to run to 31 March The Community Right to Challenge under the Localism Act 2011 (section 81) provides the right for two or more employees of the council (as well as a voluntary or community body; or a charitable organisation) to express an interest in running services that are provided by the council. Where such an expression of interest is received the council is obliged to respond according to the requirements set out in sections 83 and 84 of the Localism Act. 3.9 A public service mutual company is an organisation that has left the public sector but which continues to deliver public services. It may be owned by its employees, by its service users or a combination of those. It may also be partly owned by an external company, for example in a joint venture.

3 3.10 Where employees have taken the lead in creating it, it will often be called an employee-led or staff-led mutual 3.11 The development of staff-led mutuals is being actively supported by the Cabinet Office through its Mutuals Support Programme. This is designed to support both commissioners and delivery staff in order to maximise the number of independent organisations spinning out from local authorities and other public bodies There are a small number of staff-led mutuals already established in the youth sector, notably the Knowsley Staff-Led Mutual which is an employee and young person owned Mutual Benefit Society, and EPIC CIC which is a staff-owned community interest company which spun out from the Royal Borough of Kensington and Chelsea in There are currently no staff-led mutual organisations operating adventure play services in the UK. 4. The proposed staff-led mutual 4.1 In January 2014, the Service Director, Strategy & Commissioning, received an initial indication from a number of staff in the council s Play and Youth Service that they wanted to explore the option to form a staff-led mutual for operating the six adventure playgrounds they currently work in as council employees. This was followed in February 2014 by an initial written Expression of Interest. 4.2 In February 2014, the Commissioning Manager Play and Youth and the Area Play and Youth Officer for the council s Play and Youth Service attended a module of the Cabinet Office s Mutuals Support Programme. This provided a clear outline of the road to mutualisation for both the commissioner and the provider. 4.3 In March 2014, the Area Play and Youth Officer began another module of the Mutuals Support Programme which focused primarily on the steps to mutualisation from the provider perspective. He completed this module in July Completion and sign off from the Cabinet Office will, in due course, unlock up to 50,000 worth of further expert advice in kind support brokered by the Cabinet Office from a range of expert third parties. This support will be bespoke to Islington and is likely to include advice on governance and legal issues. 4.4 The Commissioning Manager and the Area Play and Youth Officer have also met with EPIC CIC and have secured support for the Chief Executive of that organisation to provide informal support and mentoring to the Area Play and Youth Officer through the Cabinet Office Mutuals Ambassadors programme. 4.5 In March 2014, the wider Play and Youth Service staff team was provided with an initial briefing on the concept of the staff-led mutual. 4.6 In May 2014, a steering group was established through an open process of self-nomination, comprised of six members of the Play and Youth Service staff currently delivering play services, led by the Area Play and Youth Officer. The intention is that this group will steer, with the support of appropriate advice, the development and launch of the staff-led mutual. Staff members are undertaking this work outside their current working hours. 4.7 The steering group has been meeting weekly. The key outputs of its work are set out below: stakeholder engagement mapping; regular communication with staff including a newsletter and a presentation which is being given by members of the steering group at each playground site; capacity building of the steering group members themselves; initial work on naming of the new organisation.

4 4.8 The steering group has now written to the council formally requesting that the council supports the staff-led mutual 5. Options Appraisal 5.1 There are three options that are open to the council in order to continue to provide an adventure play offer across the twelve sites from 2016 and realise the required level of savings. These are: Option 1 Option 2 Option 3 The council continues as a provider and continues to operate the six sites that it operates currently. The six sites in the voluntary sector are re-tendered; A decision is taken to tender to appoint one provider to operate all twelve sites; The council agrees to support the proposed staff-led mutual under the arrangements set out in to below. The council then procures a contract for the operation of the six sites currently managed inhouse by the council, allowing the mutual to express an interest. The six sites currently operated in the voluntary sector are separately tendered. 5.2 The option set out at would not be able to contain costs during a period of financial constraint. It is unlikely that the council would be able to achieve good value for money without reducing the availability of the service to children and families. 5.3 It remains unclear as to the strength and depth of the market for providing adventure play. Work undertaken to date suggests that there may not be a strong market of providers with the capacity and appetite to operate twelve sites. 5.4 The staff-led mutual would provide a valuable opportunity for the borough to maximise its chances of retaining long-standing, skilled play workers who are well known and respected within the communities in which they work. The mutual would also have the potential to contribute to long term sustainability through fundraising and trading. 5.5 The recommendation is that the option set out in above provides the most advantageous position for the council and for children and families in the borough. 5.6 Procurement will be conducted as either the Restricted Procedure or Open Procedure. The Restricted Procedure has two stages as the tender is restricted to a limited number of organisations. The first stage is Selection Criteria through a Pre-Qualification Questionnaire (PQQ) which establishes whether an organisation meets the financial requirements, is competent and capable and has the necessary resources to carry out the contract. The PQQ is backwards looking and explores financial standing, information about their history and experience. A limited or restricted number of these organisations meeting the PQQ requirements as specified in the advertisement are then invited to tender (ITT). The second stage is the ITT is now forwards-looking using Award Criteria. Tenders are evaluated on the basis of the tenderers price and ability to deliver the contract works or services as set out in the evaluation criteria in order to determine the most economically advantageous offer. The Open Procedure is conducted in one stage as the tender is open to all organisations who expression their interest in the tender. The Open Procedure includes minimum requirements which the organisation must achieve before their evaluation Award Criteria is considered. The evaluation criteria will be 70% quality and 30% price as more particularly agreed with representatives of the Council s Procurement Board. London Living Wage has been considered and will apply to this agreement. The Council has a responsibility in the procurement process to consider

5 Social Value which will include how the services may improve the economic, social and environmental well-being of the borough, and how, in conducting the process of procurement, the Council may act with a view to securing that improvement. 6. Support Requested from the Council In order to maximise the potential of the staff-led mutual, a number of areas of support which the council is now asked to agree are set out below: that the Council supports the further development and, in due course, the implementation of the staffled mutual; that the council procures a contract to operate and manage six adventure in-house playgrounds (Barnard Park, Three Corners, Cape, Cornwallis, King Henry s Walk and Waterside) from April 2016, with the expectation that the staff-led mutual would express an interest in the tendering for the service; that the contract is for a term of three years with a possible extension of up to two years; that the contract is for a value of 600,000 per annum for a minimum of the initial three years; that the relevant council officers undertake a staff re-organisation prior to April 2016 which will provide the appropriate conditions for the successful TUPE transfer of the play staff to the successful tenderer within the budget set out above; that the council implements shadow arrangements from a date to be decided prior to March 2015, in preparation for the mutual to be established as a legal entity; that the council supports the shadow arrangements by providing assistance in agreement with an appropriate Service Director which could include, but not be restricted to, staffing, ICT, HR, legal. These arrangements would cease on or prior to the start date of the mutual s council contract, if its tender is successful; that the council agrees to lease the six adventure play sites, including the buildings, set out in above, to the successful provider at a peppercorn rent for the term of the contract. 7. Implications 7.1 Financial implications The proposals for play and youth services will aim to provide better services within the financial constraints the Council is experiencing. The proposed value per annum for any future contract for the services currently provided in house would be 600,000. This figure includes an additional 50,000 when compared to the voluntary sector contract value. This additional resource acknowledges the additional costs associated with assimilating ex-council posts. An external contractor has the potential to be able to manage costs longer term by creating a position in which there is greater alignment in terms of pay and other financial benefits between the services operated in the voluntary sector and those operated (currently) in the local authority, as well as being able to attract additional funds and to trade. The proposed value per annum for any future contract for the services currently provided by the voluntary sector would be 550, Legal Implications:

6 Community Right to Challenge The council has a duty to consider expressions of interest in running a council provided service made by two or more members of its staff (Localism Act 2011, section 81). In considering an expression of interest the council must comply with the requirements set out in sections 83 and 84 of the Localism Act Where an expression of interest is accepted the council has a duty to carry out a procurement exercise relating to the provision on behalf of the authority of the relevant service to which the expression of interest relates (section 83(2)). Section 83 further specifies that the procurement must: be appropriate in relation to value and nature of the contract; and be carried out so as to promote or improve the social, economic or environmental well-being of the area as far is consistent with the law for the awarding of contracts. The council s window for submissions of expressions of interest for the financial year is between 1 September 2014 and 31 October The council has the option of rejecting expressions of interest received outside of the specified period but is not obliged to do so (section 82). Once accepted, however, the council must specify the minimum and maximum periods that will elapse between the decision to accept an expression of interest and date for start of procurement (section 83). Procurement Adventure play services are Part B services for purposes of the Public Contracts Regulations The threshold for application of the Public Contracts Regulations 2006 is currently 172,514. Although Part B services do not need to strictly comply with the provisions of the Regulations, there is a requirement under EU rules for part B services to comply with the principles of equal treatment, nondiscrimination and fair competition. The council s Procurement Rules require contracts over the value of 100,000 to be subject to competitive tender. If these services are to be procured as recommended in the report a competitive tendering procedure with advertisement should be used. Powers The Council is required under section 507A of the Education Act 1996 to secure adequate recreation and social and physical training facilities for children under the age of 13. This can include the establishment, management and maintenance of playgrounds. When making arrangements, the council must have particular regard to the expediency of cooperating with any voluntary bodies whose objects include the provision of similar facilities or activities. The council may enter into contracts with providers of adventure play services under section 1 of the Local Government (Contracts) Act Deed of dedication and lease The proposed Deed of Dedication is in accordance with the Council's legal powers under the Local Government Act 1972 to appropriate land for the purposes of specific functions and to grant rights in relation to council owned land. The Council owns the freehold of all the adventure playgrounds and holds some for public open space purposes and others for housing purposes. We have no record of an appropriation of the adventure playgrounds held for housing purposes from this purpose to another use. In respect of the playgrounds held for housing purposes the Council has the power under s32 of the Housing Act 1985 to grant the proposed leases with the Secretary of State s consent. The Secretary of State granted a General Consent in 2012 in respect of disposals of land under s32 and the proposed lease terms would come within the terms of General Consent Paragragh A. In respect of the adventure playgrounds held for open space purposes Section 123 of the Local Government Act 1972 enables the Council to grant the proposed leases. As the adventure playgrounds are held for and form part of public open spaces, the Council must advertise its intention to grant the proposed leases in a local newspaper for two consecutive weeks and properly consider any objections received in response to the advert (section 123(2A) of the 1972 Act).

7 The Council s ability to grant leases of the adventure playgrounds is subject to restrictions contained in the Deeds dedicating the playgrounds as QEII Fields entered into by the Council with Fields In Trust in However, the proposed lease terms and the purpose of the lettings would not breach the restrictions set out in the Deeds of Dedication. Although the Council may have the necessary power to grant the leases at less than the best rent available any decision to do so must be taken reasonably, in light of the market value of the land and buildings and the amount of proposed undervalue and with due regard to the Council s fiduciary duty to its Council tax payers. Accordingly, in deciding whether or not to grant the leases at less than best consideration the Council must consider properly the benefits to the community of doing so, as set out in this report, and weigh up and balance those benefits against the forgoing of a capital receipt or market rent for the land. Employment and TUPE The Council must, under section 101 of the Local Government Act 2003, when exercising a power to contract with a party for the provision of services, deal with matters affecting the arrangements for the pensions of its existing staff, where their employer will change as a result of that contract being entered into and carried out, and ensure that those staff are given pension benefits that are broadly comparable to those they had as employees of the local authority. The Council must, as the transferor employer in any out-sourcing of staff under a relevant transfer pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 2006 ( TUPE ), provide the transferee with the necessary employee liability information required by regulations 11 and 12 of TUPE not less than 28 days before the date of the relevant transfer. The Council must under regulations 13 and 14 of TUPE inform employees who may be affected by the transfer (and where necessary make arrangements for the election of appropriate representatives for the purposes of consultation) about the legal, economic and social implications of the impending transfer and any measures contemplated by the transferee. 7.3 Environmental Implications: This report contains no environmental implications 7.4 Resident Impact Assessment: Through the Residents Impact Assessment, the Council must, in the exercise of its functions, have due regard to the need to eliminate discrimination, harassment and victimisation, and to advance equality of opportunity, and foster good relations, between those who share a relevant protected characteristic and those who do not share it (section 149 Equality Act 2010). The Council has a duty to have due regard to the need to remove or minimise disadvantages, take steps to meet needs, in particular steps to take account of disabled persons' disabilities, and encourage people to participate in public life. The Council must have due regard to the need to tackle prejudice and promote understanding. An initial RIA screening of the proposed financial strategy for adventure play was carried out in June 2014 by the Director of Strategy & Commissioning. This screening concluded that, as no reduction in service is being proposed, fewer than five residents will be affected. Therefore a full RIA has not been completed. 8. Conclusion and reasons for recommendations 8.1 The recommendation is that the council implements the option set out in 5.1 option 3 above.

8 8.2 The assessment is that this represents the most advantageous position to the council both in terms of continuing to secure adventure play services and for children and families in terms of retaining existing relationships with trusted playworkers. 8.3 To agree the recommendation that the Executive will delegate the key decision of the award of the contract to the Corporate Director of Children s Services to expedite the award of the contract to allow sufficient implementation for a smooth transition for Young People. Appendices Background papers: Appendix 1 The Islington Council-funded Play Offer beyond April 2016: Investment Proposals Appendix 2 Islington Play Association Year 1 Performance Report Appendix 3 Quality Assessments of IPA Adventure Playgrounds 2013 and 2014 Final report clearance: Signed by: 17 November 2014 Executive Member for Children and Families Date Report author: Holly Toft, Head of Play, Youth and Post 16 Tel:

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