Alternative Service Delivery Vehicles

Craig Nicholson Branch Secretary Cheshire East Unison Branch

Background Information

• • • • • • • • Local Government Review - Cheshire East Council Four Councils transferred into One Diverse Local Authority (Cheshire, Crewe & Nantwich, Congleton and Macclesfield) Huge geographical area (Disley to Nantwich) Harmonisation of terms and conditions for all employees (Very Successful Unison Campaign) New Council Leader New Chief Executive / Managing Director New Council Management Structure New Vision for Delivery of Council Services (3 Year Plan)

Alternative Service Delivery Vehicles

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The National Budget Challenge and National Policy Context

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Demand and costs are going up Resources have significantly reduced Public expectations are higher than ever Public services have historically sought to manage the symptoms of problems rather than addressing the root causes Public Sector Funding is significantly decreasing Government Policy Response - Pathfinder schemes

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Cheshire East Borough Council : A Better Way

Maintaining a Controlling Interest in Commissioning of Council Services

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Outsourcing - private sector delivery (0%) Partnerships and Shared Services (50%) Single Legal Entities In House Service provision (100%) Wholly Owned “Teckal” Companies (100%) Charitable Trusts (20%) Joint Ventures Companies (variable) Mutual's / Co-operatives (0%)

ICT Shared Services (Single Legal Entity)

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Strengths

Efficiencies created through sharing resources, while retains public sector ethos and control.

Provides flexible base for additional partners to be incorporated.

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Weaknesses

Joint governance can be divisive (Local Council - self interest).

Lack of start-up capital or formative expertise. Sharing is difficult, if the partners’ systems need harmonising.

Harmonisation of terms and conditions required

Enterprise Model (Wholly Owned Companies)

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Strengths

Creation of an arms-length company , separates the client and contract relationship similar to CCT (some will remember those days, with less than affection) The trading company allows the local authority to work (via the Teckal exemption) and can be used to generate a profit by selling services to other organisations. Council control ensures that any wholly-owned company remains accountable to the public . Relatively low start-up costs for new companies

Enterprise Model (Wholly Owned Companies)

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Weaknesses

Councils frequently lack the commercial knowledge to establish a company ethos.

Strongly depends on having something to offer the market. Relies on clear business propositions and marketable service All risks remain with the Council.

What worked well during the Cheshire East Harmonisation Negotiations / Campaign

• • • • • • • • Unison priority has been to identify a Lead Officers for each project , and to make sure that those Negotiating on behalf of Members, have access to all relevant detailed background information (Sharing information) Unison needed to establish what options are available Structured Action Plan and Template Approach to fully document and challenge “new” terms and conditions (Standardised paperwork) Used as a good Recruitment and Retention opportunity.

Unison needs to offer leadership and guidance to our members.

Our strength is our membership within the workforce Relatively little support from local Labour Group to challenge the process, led to Joint Working with other recognised Trade Unions Good use of all means of communication , including face to face contact and regular communications are extremely important

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What Cheshire East Unison needed to do

Gather as much background information as possible in relation to new Companies. (Reports , Agendas, etc) Establish good links with other local Authority UNISON branches Build some ‘unusual alliances’ in order to gather detailed information .

Identify a key Unison Lead Officers for each new company/project, who will take the lead in negotiations, on behalf of Unison.

Good communication between Lead Officers, regular update meetings, most of all, don’t try to “re-invent the wheel” Ask the Council’s Management Team to set up a Corporate Framework for consultation, both informal and formal prior to the formal TUPE transfer of employees and issue managers guidance (standardised paperwork).

Development of the Cheshire East Unison website – as a database of information for Unison activists and a “members only” section Regular weekly electronic email updates, sent out to all Unison website subscribers, news travels quickly, be ahead of the game.

Cheshire East Unison Website Development

Types of information found in one place on website • • • • • • • • • Each Company is given it’s own webpage Cheshire East Council Agendas and Cabinet background reports Agendas & Minutes of the Trade Union Consultation meetings.

Agendas & Minutes of the Staff Stakeholder Group.

Information in relation to similar companies set up in other areas.

Information on: • what TUPE means, employees guide, easy to read explanation • what TECKAL means, employees guide, easy to read explanation • consultation timetables.

Frequently asked questions and clear answers Standardised TUPE Template, when in formal consultation Best use of Unison’s limited resources , recruit local stewards

Cheshire East Council New Companies (First Tier) started 2013/2014

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Engine of the North

- Economic Development & Strategic Development Company

Cosocious

- Former Shared Back Office Services (Single Legal Entity)

ANSA

- Environmental Waste Services Company (Wholly Owned Teckal Company)

Orbitas

- Bereavement Services Company (Wholly Owned Teckal Company)

Everybody Sports & Recreation Services

(Charitable Trust)

Congleton Town Council

(Devolution of services)

Cheshire East Council New Companies (Second Tier) 2014 onwards

• • • • • • • • • • Children, Adult and Families Commissioning Services Care4CE Social Care Services for Adults (Day Services, Respite, Reablement and Enablement services) Housing Services Transportation Services Traded Services with Schools Regulatory Services Enforcement Services Supported Employment Services Social Care Support Services Probation Services

Cheshire East Unison Challenges New Company Terms & Conditions

• Protection of employees current employment rights - Local Government terms and conditions(under TUPE regulations) - retaining NJC pay and conditions, including NJC pay rises, etc. for all employees • Provision of local authority continuous services for all employees (under Redundancy Payments Modification Order provisions) • Protection of access to the Local Government Pension Scheme for all employees (under the Pension Scheme - Admitted Body Status arrangements) - always challenge the benefits of new stakeholder pension schemes - continued access to the pension scheme including internal promotion.

• TUPE Transfer of Trade Union Recognition and Facilities Agreements, including representation rights across the new companies.

Cheshire East Cabinet Report Monday 24

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March 2014

Annual Pay Award for staff on NJC terms:

• Following a TUPE transfer the new employer is not bound by changes negotiated and agreed after the date of transfer as part of a collective agreement, where the new employer is not a party to the collective agreement bargaining process. • The Council’s owned and controlled companies will not be party to the national NJC bargaining process unless they elect to be so and will not therefore be tied to future revised terms unless they so elect. • Following consultation with the unions on this point, it is recommended that the Council’s owned and controlled companies, outside of and separate to the NJC bargaining process, will be required to apply an uplift in pay for 2014/15 which is equivalent to the uplift agreed by the NJC for 2014/15. • Beyond 2014/15 the Council will review this annually.

Cheshire East Cabinet Report Monday 24

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March 2014

Continuous Service Provision

• Each subsidiary will be required to apply to the government to be recognised under the Redundancy Payments Modification Order (RPMO). • This will protect the continuous service for employees who transfer under TUPE and those who are appointed, in future, from another RPMO body. (RPMO refers to the Redundancy Payments (Continuity of Employment in Local Government, etc.) (Modification) Order 1999 (as amended), commonly referred to as the redundancy payments.)

Cheshire East Cabinet Report Monday 24

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March 2014

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Access to LGPS for new employees:

With the greater clarity gained from decisions (i) to (iii) more focused analysis and forecasting has been completed on the question of closing the LGPS to new ASDV employees.

One of the key considerations here is to establish at what point savings could be realised from closing the scheme. That is, the tipping point where the savings from reduced future liabilities outweigh the increased costs of closing the scheme. (The costs of closing the scheme include the consequential ageing of the membership and reduction of income via new joiners. Further details are set out in Appendix 1.) Initial modelling by the Council suggests total additional costs of £183,000 in 2014-15. Beyond this the modelling suggests net savings for the Council and the ASDVs from year 7 onwards. This modelling will now be shared with the actuary for review.

The Council is also completing a more detailed analysis of the risks and impact of any decision to close LGPS to new employees.

Until this work is completed it is proposed that ASDVs are admitted to the scheme on the basis that access to LGPS will remain open to all employees.

Questions ???