Decision details

Cabinet received a report on the objectives achieved, lessons learned and the benefits realised through the transfer of maintenance and construction services back to the Authority following Cabinet’s decision at its meeting on 27 September 2017.

In making this decision Cabinet had agreed a set of policy objectives which applied to all the construction needs of the Authority, as follows:

·         Having taken a view on the delivery of the rest of the Authority’s construction work, the majority of the requirement was about housing

·         Value for money; and

·         Flexibility

Over the past two years, a project team, overseen by a Steering Group consisting of the Cabinet Member for Housing, Cabinet Member for Finance and Resources and the Deputy Mayor and Senior Officers, had worked hard to develop and deliver the correct arrangements to directly deliver a repairs and maintenance and construction service to customers.

The transfer of services from Kier to North Tyneside Council had seen:

·         Over 360 staff successfully transferred to the Authority on 1 April 2019, receiving initial induction training, and importantly their first pay cheques on time as Council employees

·         A new ICT system solution had been procured, tested and implemented to manage the repairs and maintenance and construction business

·         A new fleet of around 130 vehicles had been established; with a further 10 electric vehicles being piloted, contributing to the Authority’s climate change targets

·         New supply chain frameworks for suppliers and subcontractors had been put in place providing greater opportunities for smaller, local businesses to deliver work on behalf of the Authority

·         Staff welfare facilities at the Killingworth Depot site had been refurbished

·         Appropriate Safety, Health and Environment frameworks implemented and gas and electric accreditations secured to ensure the service was compliant and that staff could be safely put to work; and

·         Working with customers the service offer had been reviewed to ensure it met their needs.

Performance levels had continued to meet and, in some cases, exceed expectations despite all the changes resulting from the transfer of services.

There had also been a significant increase in investment in local businesses through the supply chain with the proportion of spend increasing from 12% to 29%. This upwards trend was expected to continue as the procurement strategy was further refined.

In establishing the service, a baseline budget for the 2019/20 financial year had been created. From the inception of the Construction Project in September 2017 through to the end of the 2019-20 financial year, it was forecast that total one-off savings of around £6m would be achieved.

In addition, it was forecasted that around £1.5m of permanent revenue savings and £1m of permanent capital savings per year would be recognised over the lifetime of the 30-year HRA Business Plan.

Taking into account the one-off savings, forecast revenue savings and forecast capital savings, savings of the best part of £80m should be achievable. This could be re-profiled and re-invested back into the service to meet Cabinet and tenant priorities.

Recognising these efficiencies had already allowed the Authority to:

·         Increase the focus on sustaining rental income following the roll out of Universal Credit, employing additional staff to support tenants

·         Further invest in tenant priorities, such as the empty homes standard, introducing property MOTs, and investing in pest control services

·         Deliver new affordable homes towards the Mayoral target of delivering 3,000 new affordable homes in the Borough by 2024; and

·         Further increase the Council new build budget to directly deliver more affordable homes than ever.

Mr D Bavaird, on behalf of the business sector, welcomed the report and the opportunity for local small and medium sized enterprises to bid for work.

The Elected Mayor and Cabinet Members in turn also thanked officers for their work done in successfully delivering the project.

Resolved that the report be noted.