Content

5.1.1

The Executive Director
Neighbourhood Services introduced a report by the Director of
Street Scene and Regulation Services concerning the Streets Ahead
Private Finance Initiative (PFI) Contract refresh.

 

 

5.1.2

The report outlined proposals
to amend the current contractual clauses associated with the
carriageway asset management strategy, contract termination and
provision of additional clauses for incorporating procedures for
Small Value Changes.

 

 

5.1.3

The report detailed;
 

     
i.        
why a Contract review was necessary at this
stage;

    
ii.        
the intended outcomes of the Contract Refresh,
including operational and financial benefits;

   
iii.        
current progress against the additional benefits;

  
iv.        
the governance process to achieve the
above.

 

 

5.2

RESOLVED
UNANIMOUSLY: That the Waste and Street
Scene Policy Committee;
 

1.   
Notes that officers will proceed with delivering
items 1 and 3 of table 3 in part 2 of this report through early
2025, and that a project team and a working group will be set-up
followed by the development of a detailed programme.

2.   
Agrees to changes in the PFI contract required to
enable the adoption of the proposed asset management strategy set
out in part 3, and appendix 2 to this report.

3.   
Agrees to the inclusion of an additional mechanism
for implementing small value changes into the PFI contract, as
described in part 4 to this report.

4.   
Agrees to the amendments made to sections of the
contract pertaining to the termination process, set out in appendix
3

5.   
Delegates to the Executive Director of
Neighbourhoods in consultation with the General Counsel to
negotiate and finalise the proposed contract changes noted above
and to approve the execution of the Deed of Variation subject to
DfT Approval and lender consent.

6.   
Notes that acceptance of the above changes if
approved will result in the financial benefit from Amey LG set out
part 10 of this report.

 

 

5.3

Reasons for Decision

 

 

5.3.1

The PFI is now 12 years old operationally and
the project to initiate and procure it was started over 15 years
ago. The Contract is output based which provides for only a limited
level of flexibility for community-based input and contribution.?
Generally, the Service Standards are based on 'city wide'
requirements and as such do not always address the differing needs
of the City’s communities.

 

 

5.3.2

Sheffield has changed significantly over the
last 12-15 years there have been changes to the City’s
demographics, geographical and economic shifts, the impacts of
environment issues are being felt more often and severely,
technology through innovation has also moved on significantly since
the start of the Contract.

 

 

5.3.3

The Contract Refresh and the proposals
outlined in this Report offers sustainable benefits that will
enable the Contract to be better aligned with these changing
demands.

 

 

5.3.4

As part of these changes, Amey have offered a
financial benefit to demonstrate their commitment to the delivery
of the Contract in its revised form.

 

 

5.3.5

Officers note that the proposals for asset
management and small value change will contribute significantly
towards the councils commitment to
meeting the recommendations from the Lowcock Inquiry including the
ability to operate flexibly and meet evolving demands and local
needs.

 

 

5.3.6

The proposals are underpinned by all
parties appetite to improve partnering
and the contract culture leading to a more inclusive and
transparent approach to delivering the requirements of the PFI.

 

 

5.4

Alternatives Considered and Rejected

 

 

5.4.1

Asset Management Strategy
 
The current Asset Management
Strategy is aligned to the Contract requirements. The proposed
strategy is a development to the current strategy using past
intelligence of servicing including repairs, treatments and traffic
growth to project future performance of the carriageway pavements.
The alternative to this option was a do-nothing scenario which
would mean continuing the same operations going forward. Officers
agree that the proposal to revise the strategy will add benefits to
the City in terms of increased resurfacing works with reduced
multiple visits to the same area.

 

 

5.4.2

Changes to the Termination Process
 
Several options were considered as part of the
exercise to update the termination process, these are noted
below:

 

 

5.4.2.1

Macro Level Measures Towards Triggering
Termination (Service Standard Measures
 
This option was discarded for the following
reasons:

·      
This would encourage performance to be centred around meeting
service standard levels as opposed to individual performance
requirements.

·      
There was no guarantee that individual performance requirements
would be fully observed as it would not necessarily count towards
termination.

 

 

5.4.2.2

Macro Level Measures towards Triggering
Termination (Blend of % and Strategic Performance Requirements)
 
This option was discarded for the same reasons
noted above, i.e. it did not guarantee compliance with all
performance requirements or individual requirements that would not
be included in the % performance scale or form part of the suite of
strategic performance requirements.

 

 

5.4.2.3

Recalibration of Approx 100 Performance
Requirements
 
This option was also discarded for the same
reasons noted above.

 

 

5.4.2.4

Two-Tiered Approach Limiting Default to 54 Key
Performance Measures
 
This option consisted of a stepped approach to
termination.

·      
Firstly, performance measured against all performance requirements
would be monitored, if poor performance would be triggered by
meeting the contract thresholds, then this would lead to the next
step.

·      
Secondly, performance would then be measured against 54 key
performance measures. The 54 performance measures selected was
based on past data where performance has been frequently measured
against.

 

 

5.4.2.5

This option was discarded as officers
acknowledged that whilst it would be unlikely that the service
provider would reach the termination thresholds based on past
performance, in the instance that it did, then the added second
step would unlikely be breached if the service provider
strategically remained compliant to those performance requirements,
again raising the risk of not meeting all the performance
requirements.