Report Authorised by: Sue Foster, Strategic Director, Neighbourhoods and Growth

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1 Officer delegated decision Decision Due: 25 November 2015 Extension to Existing Waiver for Hays Specialist Recruitment Wards: All Report Authorised by: Sue Foster, Strategic Director, Neighbourhoods and Growth Portfolio: Councillor Jack Hopkins, Cabinet Member for Jobs and Growth Contact for enquiries: Catherine Neal, Interim Delivery Programme Manager, Planning & Development, , Report summary Following both the 2011/12 and 2013/14 restructures the Planning and Development (P&D) service has found it difficult to fill a number of vacancies both by formal recruitment process and then subsequently via the temporary agency route. In the current economic climate, the market for high quality candidates is fast moving and these roles are considered specialist, hard to fill positions. Failing to secure suitable candidates for temporary Principal, Senior and Planner roles through the agencies they have agreements with. This presents a severe risk for the service in terms of possible non-determination, legal challenge, failure to meet statutory targets and the potential of being placed in Special Measures with the subsequent loss of income from Major applications (and associated pre-application income) as well as the loss of influence on shaping the borough and associated reputational damage this would cause. The Planning and Development service therefore needed to source outside of the Managed Service Provider (MSP) in order to develop relationships and negotiate directly with agencies to obtain the calibre of candidate required. The first waiver for the service to be exempted from using the MSP was agreed in September 2014 for a period of one year. This gave the service greater bargaining power and also access to candidates from agencies who specialise in Planning. This waiver was extended for a three month period in September to December 2015 and this report proposes the continuation and extension of that existing waiver to retain the two specialist planners obtained through Hayes Specialist Recruitment and that the officers work directly with agencies when necessary until 30 September 2016.

2 Finance summary The existing two Principal Planner positions (currently recruited through Hays Specialist Recruitment) have rates between per hour. The hours per week have been capped at 35. Both are recruited against the service s Planning Performance Agreement (PPA) business. This is a VAT rated competitive business the P&D service runs on a zero impact to the budget basis. Therefore the expertise resource is secured with the benefit of developer funding. Recommendations (1) To extend the existing waiver from 31 st December 2015 until 30 September 2016 to enable the Planning Service to continue to source outside of the Managed Service Provider as necessary and to work directly with Hays Specialist Recruitment (2) To agreed the existing officers in place are retained on the current 5 day maximum 35 hour week agreement for a further 12 month period (starting 2 November 2015 to 30 September 2016) at a value not to exceed a total cost of 136, Context 1.1 The Managed Service Provider has continued to be unable and/or struggled to find suitable candidates for the P&D service. 1.2 The P&D service has sought to secure the best candidates by developing relationships with the agencies in order to obtain greater bargaining power and access to better quality candidates who were on the agent s books. It is important to attract a high quality of candidate required to run the P&D business (much of which runs in a similar way to a trading entity and competes against other private businesses) effectively without risk to performance and income generation. 1.3 The P&D service has continually pressed for a greater recognition of this by the council for its business arm. The main goal of any private business is generally profit oriented and therefore agencies will want to obtain the best margins they possibly can. P&D, whilst having statutory, traditional type local authority duties, also runs its business arm via the pre-application and Planning Performance Agreement (PPA) services. Here, in particular with the PPA service, it is in competition with private planning consultants and must ensure it has top calibre, quality officers to offer high profile developers the support for the development of their multi million pound schemes. Clearly the benefit to the council of these schemes is manifold - including future employment, business generation and investment in the borough. 1.4 Having the freedom to build relationships directly with agencies, to negotiate and agree the P&D service s own rates with better margins for both the planning service and the agency will ultimately allow the council greater flexibility and choice as well as a potential reduction in the cost per head of agency staff. At present, too often the P&D service finds when good candidates are secured, they do not stay long because they are offered

3 better rates by their agencies at different councils who are often working outside of any MSP. 2. Proposal and Reasons 2.1 Since the restructure of 11/12 and 13/14 the P&D service has variably run with a vacancy level of between 3-7 posts. The quality of candidate presented by the MSP have at times been disappointing. The P&D service has seen an increase in the level of planning applications of 50% against the 3 year average and a 71% increase in activity from 2013/14 to 2014/ Since the start of thecurrent financial year, nine officers have handed-in their notice. A number of these have been existing permanent staff who have chosen so to move into better paid agency contracts. This illustrates the difficult employment/recruitment situation that all London boroughs are currently facing. Agencies have confirmed that they are head hunting good quality staff who are in permanent positions from both Lambeth and other boroughs for posts in other councils. This further demonstrates the difficulty which all London boroughs are experiencing in staffing retention. Agencies have also indicated their preference for placing candidates where the margins offered are greatest. In order to compete in this market the P&D service has found it has needed the greater flexibility and negotiation strength that can be found by approaching agencies directly. 2.3 Performance in the development management cost centre is under pressure, a drop in the performance for determining major applications could result in the service being placed in special measures. This would mean the council would lose its Major Applications service with the associated income this generates. Statutory fees are set by the Department for Communities and Local Government (DCLG). Mostly, they do not cover the cost of resourcing those applications. The Majors income subsidises other parts of the service, allows the service to run discretionary services such as the Planning Performance Agreement ( PPA) programme and also contributes to the majority of S106 agreements which the P&D service negotiates and draws up with developers across the borough. This generates income for other parts of the council to use such as Housing, Transport, Schools, Highways and other areas. The service also brings in Community Infrastructure Levy (CIL) income again in the Majors area this amounts to hundreds of thousands of pounds for the council. 2.4 In addition, the PPA business provides a bespoke service to developers to help them with the early stages of scheme initiation. The loss of the Major application service would render the PPA business defunct, with the loss of around k per year of associated income. In addition, members would lose influence on large scale development within the borough and the council would face reputational damage. The diminution in performance would therefore place the income streams for the service in jeopardy and would also expose the council to the risk of punitive additional costs in the form of legal challenges for non-determination. 2.5 These pressures are real risks and the outcomes ones which the council would want to avoid. Planning is a highly politicised and public facing function. As mentioned in 2.3, the P&D service secures indirectly income which funds many other areas of the council. For example, it negotiates Section 106 agreements on planning applications which

4 provide income funding for roads, new schools, highways and environmental gains. Therefore many of the council s other departments benefit from the front end work that the planning service undertakes regeneration with S106 contributions and CIL payments, transport, education, and so on. Therefore, failure to have competent and highly skilled officers in place, making difficult and complex decisions, could seriously impact not just on the P&D service, but on other areas of the council. 2.6 In the area of complaints, these arose due to lack of capacity to deal with pre-application service requests between 2012 and the decision to step outside of the MSP in 2014 to alleviate the service s resourcing isuses and obtain candidates of the calibre required The long term plan is to fill the vacancies with permanent staff. However 4 separate recruitment drives have been undertaken in this year already with disappointing returns. The process of permanent recruitment takes up a considerable amount of management time. The last recruitment drive did not produce any candidates who could be shortlisted for interview. Practically, the service needs to try to settle its existing staff and fully resource the service. The service will need to ensure it retains a pool of agency staff for its PPA programme as this is dependent on economy and climate within the building industry and therefore the service cannot risk employing permanent or fixed term staff and being tied into a salary commitment in a volatile and unpredictable industry and therefore must have the flex that agency staff allow. The service has written up an Retention and Recruitment proposal which is under consideration. 2.8 In accordance with the Lambeth Procurement guide, this waiver is necessary because of immediate risk of legal challenge to the council for non-determination of planning applications, the loss of income for failure to meet determination targets and failure to adhere to resource PPAs (discretionary VAT rated services). If the council falls below required determination targets, the Major application service (the bulk provider of income in the region of 1.9m last financial year) would transfer to the Planning Inspectorate and the council would lose both the income associated with this area of provision and also the influence and decision making power to shape the borough. This would clearly be catastrophic for the council as not only does the Major service subsidise all other types of applications, the loss of influence on development on key sites in the borough would not only impact members and residents, but other key areas, such as Regeneration, in the borough. 2.9 This waiver seeks to obtain agreement to paying the two candidates secured outside of the MSP at 136,000 for both candidates in total for a 12 month period. 3 Finance 3.1 The annual cost of the services of the two staff to be retained will be between 118k - 134k. (Assuming 48 weeks per annum and an hourly rate between 35-40) 3.2 The posts will be funded from the Planning Performance Agreement revenue cost centre (D14515), where the full employee costs are recharged to the service user. 4 Legal and Democracy

5 4.1 The Council has delegated the power to grant waivers for contracts up to 100,000 in value to the Head of Service and the Director of Integrated Support. The power to grant waivers for contracts of 100,000 and over up to 500,000 in value is delegated to Strategic Directors in consultation with the Director of Integrated Support. 4.2 The Council has adopted Contract Standing Orders, which sets out the rules and procedures for all purchases of goods services and works. For all purchases of services under 100,000 there is no requirement to hold formal tenders but purchasing officers should obtain at least three written quotes. For purchases over 100,000 a full tender process should be undertaken. In this case in consideration of the matters set out in this report purchasing officers have asked authorising officers to waive the provisions of the Contract Standing Orders to directly appoint consultants to appoint candidates for the Planning Team. All Clusters must keep a register of waivers. 4.3 The EU procurement regime applies to the matters in this report by virtue of the Public Contracts Regulations Under these Regulations services over 172,514 require the full application of the Regulations to be followed and the Council would have a duty to publish a contract notice in the official journal. There is no need to publish a notice if services fall below this threshold. The European Commissioners have issued advice saying that contracts that fall below the thresholds should be competitively tendered to provide fairness, transparency and to ensure that there is no discrimination against an applicant from another EU member state. 4.4 Awards over 100,000 must be published on Officer Decisions. 4.5 The Council s Constitution requires that all key decisions, decisions which involve resources between the sums of 100,000 and 500,000, and important or sensitive issues, must be published on the website for five clear days before the decision is approved by the Director or Cabinet Member concerned. Any representations received during this period must be considered by the decision-maker before the decision is taken. 5 Consultation and co-production 5.1 n/a 6 Risk management 6.1 None other than the risks highlighted to performance decline should steps not be taken to mitigate the risk posed by the problems faced with the MSP provision in performance diminuation which include legal challenge and special measures. This is an exceptional circumstance and one specific to the service s professional needs. 7 Equalities impact assessment 7.1 An Equality Impact Assessment has not been undertaken. 8 Community safety

6 8.1 N/A 9 Organisational implications 9.1 Environmental - None 9.2 Staffing and accommodation Phoenix House No accommodation implications 9.3 Procurement A number of agencies were approached directly by the service in the first instance and candidates were reviewed on the basis of those submitted. 9.4 Health n/a 10 Timetable for implementation 10.1 The waiver will be implemtented on 2 November. The contracts can be terminated with one weeks notice if necessary.

7 Audit trail Consultation Name/Position Sue Foster David Joyce Lambeth cluster/division or partner Strategic Director Neighbourhoods and Growth Director of Planning and Development Date Sent Date Received 26/08/15 26/08/15 15/07//15 15/7/15 Finance Business Partnering 15/07/15 29/7/15 Legal Services Enabling: Integrated 15/07/15 15/07/15 Support Wayne Chandai Corporate Affairs 27/10/15 27/10/ Democratic Services Cllr Jack Hopkins Cabinet Member: Jobs 26/08/15 30/08/15 and Growth Internal Officer Board Date of meeting Procurement Board 10/09/15 27/08/15 External Comments in para: Report history Original discussion with Cabinet Member 30/8/15 Report deadline n/a Date final report sent n/a Report no. N/a Part II Exempt from Disclosure/confidential No accompanying report? Key decision report No Date first appeared on forward plan N/A Key decision reasons N/A Background information Appendices Original waiver decision None.

8 APPROVAL BY CABINET MEMBER OR OFFICER IN ACCORDANCE WITH SCHEME OF DELEGATION I confirm I have consulted Finance, Legal, Democratic Services and the Procurement Board and taken account of their advice and comments in completing the report for approval: Signature Date Post Catherine Neal Interim Programme Delivery Manager I approve the above recommendations: Signature Date Post Sue Foster Strategic Director, Neighbourhoods and Growth Any declarations of interest (or exemptions granted): Issue Interest declared