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RESOLVED:
 
1. To note the work undertaken on the
possible insourcing of major parts of this service.
 
2. To agree a 24 months extension of the
current Corporate Security contract with CIS Security Ltd with 12
and 18 month break clauses, while these options are actively
pursued.
 
 
5. Reasons for decisions
 
5.1  The contract between
the Council and CIS Security Limited, commenced on 4th August 2018
for four years and was extended for 12 months until 3rd August
2023.
 
5.2  In this time
officers have been carrying out significant work to analyse the
Council’s security service requirements and consider options
for insourcing (or partial insourcing) of the security services.
This work has included thorough consideration of potential risks
associated with insourcing the service, including operational,
financial, reputational and legal/regulatory
considerations.
 
5.3  The current security
framework comprises three service lots. The three lots
are:
· 
Lot A.  Civic buildings security including guarding, key
holding and
alarm response
· 
Lot B.  Vacant Premises & Estate security
· 
Lot C.  Residential concierge service
 
5.4  In order to
comprehensively interrogate the current security service and
thoroughly test the viability of insourcing, the Council first
produced a full cost breakdown structure of the Council’s
current arrangements. This cost structure comprised:
· 
All staffed security
hours required by the Council and delivered by the service
provider
· 
All supervisory
hours
· 
Vehicle, equipment
& material costs 
· 
Management
resources
In so doing, we were able to assess the service as a whole
in order to identify possible efficiencies achieved from economies
of scale, as well as break the service right down into smaller more
manageable business models.
 
5.5  From the onset of
the exercise we considered the legal complexities and issues around
the Private Security Industry Act 2001 (PSIA 2001), including
reflecting experience from the management of the Council’s
CCTV service. The requirements of the legislation mean that in
providing a security service to customers, the
‘directors’ of the Council would be required to be
licensed by the Security Industry Association including Mayor
&  Councillors. 
 
5.6  Further legal advice
and local authority benchmarking clarified that the section of the
PSIA 2001 Act relating to licensing of Directors only applies in
circumstances in which security services are being delivered to a
third party. So there is therefore no requirement for the Mayor
& Members to be licensed when the Council in fact delivers the
security service to itself (licensing would be limited to those
directly involved in the delivery & management of the
service).
 
5.7  We carefully
considered parts of the service for which there may be licensing
implications under the law and excluded them from the insourcing
review. This also included specialist services such as dog
handlers. As well as safeguarding the Council by providing a degree
of certainty around legal requirements, these service elements also
fluctuate in demand requiring a high level of flexibility in the
ability to scale up and scale down resources. This makes planning
resources for these parts of the service difficult and therefore
better suited to outsourced provision.
 
5.8  Following this stage
of the review, the service elements that were omitted from further
consideration of insourcing options included:
· 
Event Security
(involving third party clients such as weddings, MP surgeries,
etc)
· 
Vacant premises &
estate regeneration security (involving third party clients, dog
handlers and unstable demand)
 
With these elements omitted from the cost breakdown
structure, the following areas of the service were considered
through further analysis:
 
· 
Corporate security
guard services
· 
Residential concierge
services
 
5.9  This represents the
bulk of the Council’s security service for which the vast
majority of staff work. The modelling took account of all security
hours currently being delivered for these services and the cost
implications if they were to be converted into full time Council
posts on the basis of:
· 
Standard 36 hour
working week
· 
4 weeks holiday
entitlement
· 
1 week sickness leave
(assumed a realistic average across the workforce)
 
5.10  The Council
Security (Lot A), which comprises the civic buildings, hostels,
events & other Council sites has a core workforce of 50
staff.
 
5.11  The Vacant
premises security (Lot B), which comprises regenerations sites and
projects has a core workforce of 27 staff.
 
5.12  The
Residential Concierge security (Lot C), which comprises the 13
tower blocks and is funded by residents, has a core workforce of 26
officers.
 
5.13  These numbers
do not include supervisory, management or response officers working
across more than one Service Lot. There are 119 total staff working
in the service.
 
5.14  Once we
modelled application of the Council’s terms and conditions
for staff to the security hours, this increased the number of staff
the Council would need to cover these hours from the 119 staff
currently delivering them under the current contract to 142; which
would represent an increase of 23 full time staff to cover the
Council’s baseline security requirement.
 
5.15  Lessons learnt
from previous insourcing exercises such as the cleaning service and
parking service were used to plan suitable resources. We were
realistic about the levels of resources that the Council would need
to efficiently cover sickness/holiday absence and build-in
sufficient resilience in order to scale up & down to meet short
notice demand such as business continuity arrangements.
 
5.16  We also
considered the management resources currently assigned to the
Council by our current service provider, and analysed management
structures and service plans detailed in previous security tender
submissions. This enabled the development in the modelling of a
management structure that was deemed sufficient and proportionate
to the service in order to effectively manage the delivery of the
Council’s security requirements. This was then used within
the cost breakdown structure for a proposed insource
model.
 
5.17  No existing
Council Service management infrastructure could be identified to
absorb the security service, whether as a whole or in its segmented
parts simply due to the size of the service. It delivers three
times more service hours than the cleaning service and would
involve the management of over 140 staff plus the management of
further contracted staff.
 
5.18  Our assessment
indicates that insourcing the security service under the current
model would cost the Council an additional £581K per annum to
deliver the same requirement for the Corporate Manned Guarding (Lot
A) and Residential Concierge Service (Lot C)
 
9. 
Alternative Options (Considered and Rejected)
 
9.1  Option:
Not to extend
 
9.2  The option not to
extend was considered and rejected on the basis that the Council
has a duty of care to provide safe and secure environments for its
staff and visitors. 
 
9.3  Option:
Retain Fully Outsourced Service
 
9.4  The Council rejected
the option to retain a fully outsourced service as it has been able
to identify efficiency opportunities that may facilitate the
implementation of a modernised insourced model for parts of the
current service.
 
9.5  In its obligation in
delivering its Sustainability & Insourcing Policy, the Council
has opted to explore these opportunities further rather than
procuring all elements of the service.  
 
9.6  Option:
Insource the Current Model
 
9.7  The Council rejected
the option to insource the service under the current security model
as it is unable to identify funding to meet the increased
oncosts identified.
 
9.8  The Council also
recognises the need for modernisation within the service so
understands that insourcing under the current model and reforming
the service thereafter would bring added costs associated around
service modernisation and rationalisation of resources, such as
potential redundancies and pension payments.
 
9.9  The Council also
understands that a simple “lift and shift” exercise
would present a high risk of existing staff leaving due to earning
caps placed under a Council model that do not apply within the
outsourced provision.
 
9.8  Therefore in order
to future proof the service and make sure that suitable resilience
is built-in, further assessment of security roles and salaries in
line with industry benchmarking will be necessary.