a) Financial No b) Community No Councillor Nick Rushton

Transcription

1 NORTH WEST LEICESTERSHIRE DISTRICT COUNCIL CABINET 31 AUGUST 2010 Title of report Key Decision VALUE FOR MONEY PROGRAMME PROPOSED LEGAL SHARED SERVICE a) Financial No b) Community No Councillor Nick Rushton Contacts Chief Executive Head Legal and Democratic Services and Monitoring Officer Purpose of report Reason for Decision Strategic aims To update Members on the outcome of the Legal Services review as part of the value for money programme. To implement a shared service approach, working with Charnwood Borough Council. Organisational Development Implications: Financial/Staff Phase 1 of the proposal will produce annual cashable savings and generate an income by the creation of a shared practice management post, selling time of one employee, and this in turn will facilitate and support further planned efficiencies/service improvements/cashable savings. Two part time posts will be deleted and 1 fte post will be created which will be virtually shared but may require the employee(s) holding that post to work on site at the Charnwood Borough Council (CBC) Offices. Depending upon the outcome of the recruitment procedure, this may result in the redundancy of up to two part-time employees. Staff involved will remain employed by their respective Councils. The Council has purchased electronic case management software to facilitate the closer working relationship and management of the shared service and deliver service improvements and efficiencies. All costs will be met from within existing budgets.

2 Link to relevant CAT Risk Management Equalities Impact Assessment Human Rights Transformational Government Comments of Head of Paid Service Comments of Section 151 Officer Comments of Monitoring Officer Consultees Not applicable. Proposals are being managed using formal project management arrangements. Not applicable. None identified at this stage. Alternative models for delivery of services that deliver cash savings is a fundamental part of the transformational government programme. The report is satisfactory. The report is satisfactory. As report author, no comment. CLT, Strategy Group, Staff and Trades Unions at both authorities. Background papers Business Case dated 28 January Recommendations 1. THAT CABINET NOTE THE DECISION TO PROGRESS TO A SHARED SERVICE APPROACH FOR THE DELIVERY OF LEGAL SERVICES. 2. THAT CABINET NOTE THE DECISION TO PURCHASE THE ELECTRONIC CASE MANAGEMENT SYSTEM TO FACILITATE THE MANAGEMENT OF THE SHARED SERVICE. 1.0 BACKGROUND AND APPROACH TO SHARED SERVICES 1.1 A Leicestershire single model shared services project was proposed in early 2008 lead by Hinckley and Bosworth Borough Council, supported by external consultants and leading external lawyers. NWLDC withdrew from the project in May This was because the business case and financial model did not deliver the required level of legal service and would have incurred additional costs rather than savings CBC withdrew from the Leicestershire single model project in January It is understood this was for the same reasons as NWLDC. Subsequently, at a meeting of the Chief Executives of NWLDC, CBC and HBBC it was agreed to adopt a different approach and develop a North / South model for legal services in Leicestershire.

3 1.3 The North model comprises NWLDC and CBC. The South model comprises HBBC, OWBC, BDC and North Warwickshire. 1.4 After three years of operation of the North/South model there will be a further review of the models on the basis of agreeing options for a unified approach to legal service delivery in Leicestershire. 1.5 NWLDC / CBC have been in active discussions since May 2009 about a potential legal shared services / partnership opportunity between the two authorities. Since CBC withdrawal from the Leicestershire project it has been possible to: (i) (ii) agree a draft business case (in principle) and pursue the joint arrangement (subject to respective consultation, governance and Cabinet approvals); commence two short discrete projects providing professional advice services to CBC on Practice Management and Lexcel. These projects generated 4,545 income for NWLDC in 2009/ Legal Services was listed in the Value for Money Programme as a Category A VfM review which focussed on income generation. 2.0 THE NORTH MODEL NWLDC / CBC BUSINESS CASE 2.1 An options appraisal was carried out exploring other service delivery methods. The drivers were resilience, flexibility, service improvement, value for money and to realise cashable efficiency savings and generate income whilst reducing the level of external spend across both authorities. 2.2 The business case recommended the option of a shared service with CBC as this would deliver all of the benefits requested and maintain the in-house approach to delivery which was favoured by the clients. The shared service with CBC option has been endorsed by CLT and Strategy Group. The Senior Management Team at Charnwood has also considered the option and took a report to their Cabinet on 8 July 2010 which was approved. 2.3 Both authorities have agreed to a phased approach to joint working in the following areas: Alignment of Admin Support Alignment of IT/Case Management Systems Alignment of Fee Earning Structure 3.0 PHASE 1 ALIGNMENT OF ADMIN SUPPORT AND IT/CASE MANAGEMENT SYSTEMS 3.1 Initial focus will be on the alignment of administration support developing shared processes, IT systems and practice and performance management. This will be carried out under the supervision of the Practice Manager (NWLDC) leading to the creation of a joint admin team across both sites that will be able to perform work for both fee earning teams enabling greater resilience and creating capacity for the fee earners (lawyers/paralegals) to concentrate on delivering the more complex legal advice work.

4 This will improve their efficiency and will enable more externalised work to be delivered inhouse providing cashable savings. 3.2 This phase was split into three stages and stage one, the review of CBC admin support by the Legal Practice and Member Development Officer, has now been completed. The review report was delivered to CBC on 23 April 2010 and a meeting to discuss the findings and recommendations was held on 26 April One of the recommendations of that review was to create a joint admin team structure between NWLDC and CBC to facilitate the wider anticipated efficiencies detailed in the business case. There are some staffing implications for both authorities as a result of this phase and appropriate consultations have taken place. 3.3 Stage 2 of this phase involves the alignment of practices and procedures including the sharing of the electronic case management system currently utilised by CBC. Significant work has already gone into this phase in terms of obtaining the software system and overcoming the technical difficulties in connecting the two sites. In accordance with the rules and procedures in the constitution Cabinet is notified that the software has been procured by way of exemption under CPR 4, under the following categories b) only one supplier is available for technical or artistic reasons; e) the procurement of a named product or service required to be compatible with an existing product or service previously provided in relation to the same matter. 3.4 Stage 3 is the implementation phase of the revised staffing structure enabling the virtual sharing of admin posts and the sale of the Legal Practice Manager post s time (0.45fte) to CBC which will deliver an income for NWLDC and support the delivery of cashable savings at CBC. Following acceptance of the report by the CBC Cabinet on 8 July 2010 implementation of this stage is now underway. 4.0 PHASE 2 - ALIGNMENT OF FEE EARNER STRUCTURE 4.1 In parallel to the above work being carried out NWLDC will aim to work closely with CBC to examine the current levels of legal expertise of the teams at both authorities and to develop a business case for the implementation of a complimentary fee earner structure. The current business case recommends that the external legal spend at CBC is centralised (as at NWLDC) and monitored and reviewed by the Practice Manager. This will enable each authority to offer first refusal on work before it is externalised to private practice solicitors to reduce external spend. A charging structure will be agreed as part of the development of this phase. In 2009/10 NWLDC spent a total of 46,275, the majority of this was for specialist advice barristers (excluding 45,000 for the Packington Nook enquiry which was subsequently recovered) and CBC spent 325,918; the largest expenditures for CBC were on the Loughborough Eastern Gateway ( 152,435), Procurement ( 84,639) and Commercial Property/Regen ( 36,408). 4.2 The development of a complimentary fee earner structure will allow work to be targeted to the relevant expertise at each authority and together with efficiencies from shared practice management will enable the external spend to be reduced further by bringing more work back in-house, or possibly providing services for other local authorities. A potential opportunity to share the contracts and procurement and employment post at NWLDC, and also to share the now vacant solicitor post have been explored with CBC and CLT has

5 recently received and considered a report on the options, risks and opportunities of this proposal. 4.3 A brief summary of external spend and cost comparison demonstrates the potential for shared working and savings as shown in the following table: HOURLY RATE IN-HOUSE CONTRACT MANAGEMENT COSTS FINAL COST / HOUR COST TO CBC / NWLDC In-house principal lawyer 1,231 fee earning hours per year (incl on costs) 45 Nil 45 55,395 External 2-5 yrs pqe 1,231 hours per year minimum per case , ,300 plus contract management costs 5.0 PHASE 3 CONSOLIDATION AND REVIEW 5.1. Phase 3 of the project will be carried out after 2-3 years of operation of the shared service arrangements. This will involve a review against the Leicestershire South Model and look at whether or not the two could practicably be merged whilst maintaining the level of benefits for each authority. 6.0 FINANCIAL IMPLICATIONS 6.1 The Regional Improvement and Efficiency Partnership has set the North model a savings target of 100,000 to be gained from implementing the shared service arrangements. 6.2 Phase 1 is the only phase which has detailed costings against it at this moment but it is anticipated that the bulk of the savings can be met by centralising the external spend at CBC and closely managing the outsourcing of work in accordance with agreed criteria. Phase 1 is the foundation which will enable further improvements and efficiencies to be realised. There will be one-off capital investment costs in 2010/2011 which can be met from existing budgets. The initial main benefit to NWLDC is the income for the time of the Legal Practice Manager post. All expenditure associated with this project can be met from existing budgets. 6.3 The costs for 2010/11 and expected income for 2011/12 and thereafter at NWLDC are as follows:

6 2010/11 Purchase of case management system and associated hardware costs 25,900 (One-off capital investment) Potential one-off redundancy costs 1,700 LESS Indicative income for Practice Manager 9, (figure dependent on start date) Savings from admin restructure 1,550 Phase 1 total costs 16, /12 thereafter year on year estimated minimum annual savings Annual software maintenance contract 1,850 (10 users) LESS Income for Practice Manager 17,390 Annual savings from admin restructure 3,200 Phase 1 total savings 18, The figures indicate that the Council will achieve a return on its investment by the end of year one of the shared practice management arrangements and these savings will continue throughout the life of the shared service and this does not account for any income generated or savings made from the fee earner alignment phase. 7.0 GOVERNANCE 7.1 The making of agreements with other local authorities for the placing of staff and joint working arrangements is a local choice function delegated from Council to the Chief Executive. 7.2 The staff sharing, shared practice management arrangements, and financial objectives agreed in the business case will be formalised by contractual arrangements based on the model already agreed for the Communications Service shared with CBC.